European Shares Stumble On Info Data Drop For Sixth Month

European stocks retreated on Friday, continuing to recede from highs despite positive broker backing from firms including Credit Suisse and Morgan Stanley.

The Stoxx Europe 600 XX:SXXP dropped 1% in afternoon trade, and the index is now down over 3% from record highs set in November. The European backdrop has been difficult with new coronavirus-related fears in addition to key economic data including German Business Confidence that fell for a sixth month according to a closely watched survey released on Friday.

The Ifo institute said its monthly confidence index for Europe’s biggest economy dropped to 94.7 points in December from 96.6 last month. Managers’ assessment of both the current situation and the outlook for the next sixth months worsened.

European markets have all but given back Thursday’s gains, when investors reacted positively to central bank policy decisions. The Federal Reserve on Wednesday announced that it would be aggressive on tapering bond purchases and sees several rate hikes in 2022.

However, with inflation running at more than double target in the U.S., euro zone and the U.K., concerns are lingering as to whether it can be brought under control.

Meanwhile, the omicron variant is spreading at an alarming rate, with countries across Europe implementing containment measures in a bid to avoid a tsunami of cases. The U.K. reported over 90,000 cases in a single day on Friday, but daily deaths remain relatively stable for now.