Eurozone CRASH fears as markets dive into the RED
STOCK markets across Europe plunged this morning, with the Eurozone economy now in deflation territory.
By LANA CLEMENTS
Express.co.uk
Fri, Apr 29, 2016
France and Germany’s top stock markets the DAX and the CAC were both in the red by one per cent and 1.4 per cent respectively amid the news, highlighting investor fears over the figures.
Spain’s leading market the IBEX was down by 1.5 per cent.
It comes despite Europe’s economy faring better than expected for the first quarter of the year.
The single bloc’s economy surprised critics by growing 0.6 per cent in the first three months of the year.
But the eurozone is now in deflation territory, as prices dropped to a worrying -0.2 per cent in April.
Experts said the lower energy prices were behind the rise in the eurozone’s growth.
Michael Hewson, chief market analyst at CMC Markets UK, said: “Underlying inflation continues to run away from the ECB’s base line rate of two per cent dropping to -0.2 per cent in April on annualised basis.
“Drilling down into the detail it’s not hard to see where most of that decline came from, with sharp declines in energy prices contributing to all of the decline.
“Given the surprise jump in the Eurozone Q1 GDP numbers it would seem that energy prices and not negative interest rates are acting as a fiscal stimulus and helping to support the recovery in the European GDP numbers.”
Howard Archer from IHS Economics added: “It is unlikely that the Eurozone will be able to sustain this growth rate in the second quarter.”
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