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Nexi jumps after 2025 target plan exceeds consensus
Banks, utilities see sharp losses
Sept 27 (Reuters) - Europe bourses fell on Tuesday,
extending a sell-off driven by escalating fears of a recession
amid aggressive policy tightening by central banks, with London
stocks reeling from worries about a new economic plan.
Germany's DAX slipped 0.7% to November 2020 lows,
while Italy's MIB index lost 1.2% giving back all of
Monday's election relief gains.
The continent-wide STOXX 600 index closed down
0.1% after a volatile session which saw it rise as much as 1.3%.
Gains in miners, energy and healthcare
stocks were offset by sharp falls in banks and
London's blue-chip FTSE index slipped 0.5% as the
pound recovered from Monday's record lows on worries
about the impact from the UK's "mini budget".
"The stabilisation of the pound has come on the back of
expectations that the Bank of England will tighten policy a lot.
There's decent space for the BoE to disappoint expectations and
if that happens, the pound could resume its downside ride
against the dollar," said Themos Fiotakis, head of FX research
at Barclays in London.
The STOXX 600 lost 4.4% in the last four sessions, as
downbeat data on regional economic activity coupled with
interest rate hikes by several central banks fed fears of a
global economic downturn.
"We had a pretty big spike in risk aversion in September, so
there is a little bit of short covering, there's a little bit of
relief but nothing particularly fundamental," said Fiotakis.
"In fact, what I worry is that if we continue to get
datasets that are solid for the United States, we could see an
even more hawkish Federal Reserve response."
Markets have been wary about the pace of tightening by the
Fed this year after three super-sized 75-basis-point interest
rate hikes and hawkish signals.
Goldman Sachs expects the European Central Bank to hike
rates by 75 basis points at its next two meetings, Bloomberg
News reported. The ECB has already raised its key rate by 125
basis points to 0.75%, the fastest pace of rate hikes in its
Among individual shares, Nexi gained 2.7% after
the company estimated an excess cash generation of around 2.8
billion euros ($2.70 billion) in 2023-2025 which can be used to
pursue M&A opportunities or to return capital to shareholders
via buyback and dividends.
(Reporting by Devik Jain, Amruta Khandekar and Susan Mathew in
Bengaluru; Editing by Sherry Jacob-Phillips)