European stocks retreat as eurozone economy ekes out…

European stocks retreat as eurozone economy ekes out growth

The eurozone economy expanded just 0.1 percent in the first three months of the year over the previous quarter. ©AFP

London (AFP) - European stock markets retreated Friday as official data confirmed the eurozone is struggling to grow.

Asian equity indices earlier closed higher after strong gains Thursday on Wall Street as largely well-received earnings from US tech giants this week helped to offset global recession fears.

The United States on Thursday revealed its economy slowed more than expected in the first quarter.

That preceded figures Friday that showed the eurozone economy lumbered forward in the first three months of the year -- expanding just 0.1 percent over the previous quarter as high inflation and interest rates weigh on activity.

Focus is turning to the Federal Reserve's monetary policy meeting next week, with the market expecting the US central bank to consider strong consumer spending and a drop in weekly jobless claims as evidence that the economy can take more inflation-fighting interest rate hikes.

The European Central Bank also decides on rates next week.

On Friday, the International Monetary Fund's department director for Europe, Alfred Kammer, urged the continent's central banks to "kill the beast" of inflation by continuing to hike interest rates.

The Bank of England has ramped up its own borrowing costs since the end of 2021, while markets fear that carrying on down a path of monetary tightening could tip the world economy into recession.

"The very small increase in (eurozone) GDP...means a technical recession has been avoided by a whisker," noted Capital Economics' chief Europe economist Andrew Kenningham.

"However, the economy has essentially stalled as domestic demand has been hit hard by the energy shock followed by monetary tightening."

On the corporate front Friday, ExxonMobil reported that first-quarter profits more than doubled to $11.4 billion.

Even though oil prices were lower during the reporting period compared with a year earlier, earnings still won a boost from a better performance in the refining business.

Earnings in the first three months of last year had taken a knock from one-time costs associated with ExxonMobil's withdrawal from a project in Russia, a move taken after the country's invasion of Ukraine.