European stocks drop on Friday amid concerns of slowing growth.

European stocks took another hit on Friday as shareholders are anticipating a series of reports in the next few days following concerns that growth might be slowing.

European equities fell again on Friday, following two days of losses. Investors are concerned about the economy and looking forward to a busy month of earnings, which is why they are selling European stocks.

The Stoxx Europe 600 Index fell 0.4% at 12:23pm in London after posting its worst first-half performance since 2008. Retail, utilities, and energy stocks were higher, while miners, technology and travel stocks were the worst laggards. Earlier in the day, the market erased a decline of as much as 1.1%.

In 2022, European stocks were affected by central banks around the globe tightening monetary policy to control inflation, with the region's main equity benchmark falling 16% year to date. Now, strategists are concerned about first-half earnings reports as companies may have to trim their outlooks as consumer spending slows and input costs rise further.

  

Peter Garnry, head of equity strategy at Saxo Bank, said that global earnings have dropped by 10% since the peak and that there will be more weakness during the second-quarter earnings season as companies are still feeling the effects of higher energy prices, rising wages, supply chain disruptions, and high logistics costs.

P/Es Busted, Look to EPS, Duration Risks in 2Q Results

European chipmakers' stocks fell on Friday following Micron Technology Inc.'s release of fourth-quarter forecasts that fell short of analysts' expectations.

Investors may start to add to positions in quality stocks with strong balance sheets and pricing power, as valuations across sectors have been reduced, according to Kirsty Desson, an investment director at Abrdn.

Desson said that when it comes to hot stocks, it is possible to make good investments.

To learn more about equity markets:

  • Auto sales fell to a 19-month low, suggesting that investors are bearish about the future.
  • Siemens, Telecom Italia, Bonduelle and Craneware are four of the companies that have been acquired by the German engineering giant in recent years.
  • ECM Watch: Tepid De Nora IPO Doesn't Boost Confidence Much
  • US stocks are expected to fall further after their worst first half since 1970
  • Sorrell Acquires XX Artists: London's Latest Craze

If you want to stay up-to-date on this market, click here for the First Word channel of actionable news from Bloomberg and other sources. You can customize it to your preferences by clicking into Actions on the toolbar or hitting the HELP key.