Europe’s biggest economy Germany shrank marginally in 2023, official data showed, as costly energy, high interest rates and cooling foreign demand took their toll
European stock markets dropped Monday as data showed Germany’s economy shrank last year, while oil prices cooled despite fresh tensions in the Middle East.
European stock markets were weaker as the week got off to a comparatively quiet, risk-averse start, noted Neil Wilson, chief market analyst at Finalto trading group.
Europe’s biggest economy Germany shrank marginally in 2023, official data showed, as costly energy, high interest rates and cooling foreign demand took their toll.
Output declined by 0.3 percent year-on-year, federal statistics agency Destatis said in preliminary figures.
With US markets closed for the Martin Luther King holiday there has been little incentive to push markets higher, with the heavier tone in Europe also being led by hawkish pushback on European Central Bank rate cut expectations, said CMC Markets analyst Michael Hewson.
Wall Street reopens Tuesday after a long holiday weekend in the US.
In Asia, Tokyo gained for a sixth consecutive day, building on last week’s advances, which saw the Nikkei break above 35,000 for the first time since 1990 due to a revival of Japanese inflation and a weaker yen that helps exporters.
Shanghai also enjoyed a rare gain, after People’s Bank of China decided not to cut short-term interest rates but poured billions of dollars into financial markets.
Taipei advanced after pro-sovereignty candidate Lai Ching-te won Taiwan’s presidential election, but his Democratic Progressive Party (lost its majority in the legislature.
Oil prices declined, having soared Friday over supply concerns as tensions escalate in the Middle East.
Chris Beauchamp, chief market analyst at IG, said “the lack of a surge in oil prices suggests that demand is just not strong enough at present to drive a new leg higher for crude.”
The dollar jumped against its main rivals on Monday.
