European Markets Struggle Amid Economic Woes
European shares hit a two-week low due to challenges in UK banks and economic data from the U.S. and euro zone. Market concerns include Federal Reserve independence, political uncertainty, and inflation. Renewable energy stocks declined, with tensions also visible in French and German markets.
European shares ended on a low note Friday, marking their weakest performance in over two weeks, influenced by a slump in British bank stocks. Natwest saw a decline of 4.8%, while both Barclays and Lloyds experienced drops of 2.2% and 3.4% respectively. This trend followed a think tank's suggestion for Britain to tax banks on interest from the Bank of England reserves.
The broader banking index also suffered, falling 0.9% and recording its sixth consecutive session of losses, its longest streak since October 2023. The pan-European STOXX 600 index closed with a 0.6% decrease, attributed to concerns over the U.S. Federal Reserve's independence and political tensions in France, despite a rise over the last two months.
French political instability looms, with the CAC 40 dropping 3.3% this week on fears regarding Prime Minister Francois Bayrou's administration. Economic indicators showed mixed results, with German inflation exceeding expectations, while unemployment rose. Renewable energy firms like Orsted and Vestas Wind faced setbacks as the U.S. canceled funding for various offshore wind initiatives.
(With inputs from agencies.)
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