LONDON – European stocks retreated on Monday, following a negative mood in the world as investors continued to think about persistently high inflation.
The pan-European Stoxx 600 slipped 0.6% below the straight line in early trade, with underlying resources falling 1.9% to lead to losses as almost all sectors and major stock markets slipped into negative territory.
The risk aversion in European markets comes after regional stocks retreated at the end of the last trading week after falling in US markets, and Wall Street last Thursday announced its worst day since 2020.
U.S. stock futures fell in early pre-trading as traders sought a market to take hold after a dramatic trading week.
Last week, the Nasdaq Composite lost 1.54%, while the S&P 500 and Dow fell 0.21% and 0.24%, respectively. It was the sixth consecutive week of losers for the Dow, and the fifth in a row for the other two major indexes.
Shares in Asia and the Pacific retreated on Monday as investors monitored market reactions to Chinese trade data that were better than expected.
Investors are also watching the war in Ukraine for fear that dozens were killed after Russian shelling hit a school in the Luhansk region of eastern Ukraine. Lugansk is one of the two regions that make up Donbas, where Russian troops are now mostly concentrating their attacks.
Russia is also under scrutiny on Monday as it prepares for “Victory Day” – a holiday commemorating the defeat of the Soviet Union by Nazi Germany in World War II.
Strategists said President Vladimir Putin could take the opportunity, marked by mass military parades in Moscow, to declare victory in Ukraine or escalate the conflict.
U.S. First Lady Jill Biden paid a surprise visit to Ukraine on Sunday. The U.S. and the Group of Seven countries have announced they will increase short-term financial support to Ukraine as the war with Russia approaches its three-month mark.
Earnings come from BioNTech on Monday.
In terms of individual stock price movements in Europe, Deutsche Post fell 6% to the bottom of the Stoxx 600 in early trading, while Italian airline and defense company Leonardo gained 4%.
– CNBC’s Jesse Pound contributed to this market report.