European Markets Open to Close: Earnings, Davos, Recession Fears

LONDON (AP) — European stocks closed lower on Tuesday as investors were rattled by fears of an impending recession.

The pan-European Stoxx 600 closed down 1.1%, with the retail and travel sectors falling 3% to lead losses as most sectors fell into negative territory. Tech shares fell 2.5% after an earnings warning from US social media company Snap and news of layoffs at European start-ups Klarna and Gorillas.

Shares of UK power generation company Drax Group sank almost 14% towards the bottom of the Stoxx 600 after Citi cut the shares to “sell” from “neutral” and lowered its price target. The main gainers in Europe were Danish hearing aid company GN Store Nord, which rose more than 11%.

European stocks, which had closed higher on Monday, retreated from those gains amid warnings of a possible recession. On Monday, Swedish firm Buy Now Pay Later, Klarna, said it plans to lay off around 10% of its employees, blaming the economic fallout from the war in Ukraine.

CNBC Pro Stock Picks & Investing Trends:

Day 2 of Davos

The World Economic Forum will take place in Davos this week and will bring together political and business leaders from around the world. This year’s summit comes after several years of the Covid-19 pandemic and in the midst of Russia’s invasion of Ukraine, which is at the top of the agenda.

On Tuesday, CNBC spoke to a wide range of leaders, including the chairmen of Publicis Groupe and Standard Chartered, the CEOs of Nokia and ABB, and Gita Gopinath, the IMF’s first deputy managing director, among many others.

On the data front in Europe, a flash Purchasing Managers’ Index (PMI) for the euro zone in May came in at 55.8, slightly above estimates, as business growth across the continent slowed but remained resistant.

Did you like this article?
For exclusive stock picks, investment ideas and global live streaming from CNBC
Enroll in professional cnbc
Start your free trial now

– CNBC’s Ryan Browne contributed to this report

Add Comment