ECB, Chinese economy and luxury companies: How do current developments affect the European markets?

ECB, Chinese economy and luxury companies: How do current developments affect the European markets?

According to a report by amp2.wiwo.de, European markets are under pressure after doubts about a quick interest rate cut from the ECB and disappointing economic data from China. The fashion retailer Zalando even hit a record low.

The disappointing economic figures from China have weighed on the European stock markets, with Dax and EuroSToxx each losing 0.9 percent to 16,415 and 4,404 points. That's because China's economy narrowly missed analysts' expectations, leaving investors worried about weak demand from the world's second-largest consumer of crude oil. This in turn led to a fall in oil prices. In addition, investors were plagued by doubts as to whether the European Central Bank could initiate the interest rate turnaround in the spring as hoped.

This pressure on European markets meant that shares of European luxury companies such as Kering and Moncler, as well as Zalando, came under pressure. The fashion retailer's titles fell by up to 5.1 percent, marking an all-time low. This indicates weak consumer sentiment, which even led to a loss of around 35 percent in 2023. The shares of the Italian Telecom Italia, on the other hand, rose by up to three percent after the Italian government gave the green light for the sale of the fixed network to the US financial investor KKR.

Overall, these developments could lead to continued volatility in European markets as investors continue to await US data on imports and retail sales as well as the Fed's economic report. Uncertainty surrounding ECB interest rate cuts and the weakness of the Chinese economy could continue to have a negative impact on the market.