European Stocks Close Sluggish
European stock markets closed sluggish on Monday (July 20th), still enduring pressure from last week's decline. Investors remained cautious due to the worsening macroeconomic backdrop, while the market awaited the release of major issuers' earnings reports this week.
The Euro STOXX 50 closed flat at 6,228, while the STOXX Europe 600 fell 0.3% to 639.9. This limited movement suggests investors are reluctant to take aggressive positions amid rising global risks.
The main pressure came from surging European natural gas prices. Escalating attacks between the United States and Iran disrupted the flow of LNG tankers through the Strait of Hormuz, raising new concerns about inflation in the Eurozone.
The European Central Bank (ECB) is still expected to keep interest rates unchanged at this week's meeting. However, market expectations are growing that the ECB could raise rates again this year if energy inflation pressures persist.
The banking sector moved mixed ahead of the crucial earnings week. Santander weakened slightly, while UniCredit rose 0.5% and BNP Paribas gained 1.1%. Meanwhile, LVMH fell more than 1.3% as rising global yields weighed on consumer spending prospects.
As a result, European markets remain at risk of volatility as long as gas and oil prices remain high. Rising energy costs could squeeze corporate margins, reinforce expectations of high interest rates, and make investors more defensive towards consumer stocks, airlines, and inflation-sensitive companies.
Source: Newsmaker.id
