Europe close: Stocks slip amid record German producer prices and natural gas quotes
European equity markets extended their losses on Friday, with investors assessing the inflation picture on both sides of the Channel following a record rise in German producer prices.
"After four weeks of gains, European markets appear to have run out of puff this week, spooked in some part perhaps by the big jumps in inflation we’ve seen in UK CPI this week, as well as this morning’s eye-watering surge in German PPI for July," said Michael Hewson, chief market analyst at CMC Markets UK.
The pan-European Stoxx 600 index was down 0.77% at 437.36, alongside a 1.96% drop on the FTSE Mib to 22,534.47 while the Dax slipped 1.12% to 13,544.52.
Complicating matters, in the background Dutch TTF natural gas futures were jumping by 16.4% to €257.4/MWh.
Earlier, the Federal Office of Statistics had reported that German producer prices in July recorded their highest ever increases both year-on-year and month-on-month as energy costs continued to soar due to the Ukraine war.
In parallel, the yield on the benchmark 10-year Italian bond rose by 17 basis points to 3.498% and the US dollar index was up by 0.53% to 108.06.
In equity news, Just Eat Takeaway topped the Stoxx 600 leaderboard, surging 26% after the online takeaway platform agreed to sell its 33% stake in Brazil’s iFood joint venture to Prosus for up to €1.8bn in cash.
Insulation and building materials company Kingspan was right behind, jumping 6% after hitting record revenues and posting a higher half-year profit.
French catering and food services group Sodexo slipped after Jefferies cut the stock to "hold" from "buy" to factor in a cautious recessionary scenario over fiscal year 2023-2024.