Europe stocks closed at a six-month low on Wednesday as concerns over inflation and slowing growth continued to weigh on sentiment. The Stoxx 600 index, Europe’s benchmark, closed at its lowest level since March 28. The decline was led by the FTSE 100, which slipped 0.4%, while Germany’s DAX was down 0.3% and France’s CAC 40 was flat. The Stoxx 600 is down 2.3% month-to-date, a slight improvement from its 2.8% decline in August. The ongoing trade war between the US and China, as well as Brexit uncertainty, have contributed to the downward pressure on European markets.
Oil and gas stocks saw a 1.5% gain on Wednesday afternoon amid broader downbeat trading as oil prices surged on supply concerns. Brent crude and WTI futures climbed 2.9% and 3.4% respectively. The rise in oil prices boosted oil and gas stocks, which outperformed the wider market. US energy stocks also performed well, gaining 2%. The developments in the oil market highlight the ongoing volatility and trade tensions affecting the global economy.
The British pound and euro continued to slide against the US dollar, as both the Bank of England and the European Central Bank indicated they are putting rate hikes on hold. This lack of support from future interest rate rises has weakened the pound and euro against the dollar. Sterling hit its lowest level since March 16, down 0.1% at $1.214, while the euro fell 0.5% to $1.0517. In contrast, Federal Reserve officials suggest that US rates may need to be raised, creating further divergence between the US and European currencies.
