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Wall Street slid on Friday with the key indices closing lower for the week and the Nasdaq snapping an 8-week winning streak as investors shift focus to the high potential of a US and possibly global recession. The Dow Jones fell 1.7% over the week, the S&P500 lost 1.4%, and the tech-heavy Nasdaq also fell 1.4%. Inflation around the world remains elevated, and stock markets have been on a solid rally of late, so investors have pulled back optimism and now assess the high likelihood of a US recession as the Federal Reserve maintains an aggressive stance toward tackling inflation. Shares in Goldman Sachs declined on Friday after CNBC reported the investment bank is likely to face a large write down for its 2021 acquisition of fintech firm GreenSky.
Over in Europe, markets in the region closed lower on Friday amid dampened global investor sentiment and on the back of a hawkish 50-basis point rate hike out of the Bank of England on Thursday. In the eurozone flash purchasing managers’ index data, a fall from 52.8 points to 50.3 points. A reading below 50 indicates a contraction, which is something to keep in mind for the euro zone over the month ahead. The STOXX600 fell 0.3% on Friday, Germany’s DAX fell 0.99%, the French CAC lost 0.55%, and, in the UK, the FTSE100 lost 0.54%. German energy company, Siemens Energy tumbled 37% on Friday after scrapping its profit guidance due to issues with its wind turbine division.
On the local index, the ASX200 dived 1.34% on Friday, weighed down by a near 4% loss in the energy sector as the price of oil dipped 3.15% last week to US$69.71/barrel as rate hike concerns and recession fears weigh on demand outlook for the commodity. The utilities and consumer staples sectors were the only two to close in positive territory on Friday.
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