Amid slowing global growth, leading European equity markets are experiencing the impact, with key indices recording historical lows.
The Frankfurt DAX 40 (DE40), a top index in Europe, is among the most affected plunging 0.8%, hitting a five-month low of 15,042. The index last hit the level back in May this year.
The slowing economic growth has been coupled with rising interest rates and inflation, with the region making attempts to recover from the shadows of the coronavirus pandemic.
Notably, the plunge is significant considering the DAX index is the benchmark index for the German equity market.
The index tracks the performance of 40 selected German blue-chip stocks traded on the Frankfurt Stock Exchange. Notably, the exchange accounts for almost 80% of the market capitalization listed in Germany.
A significant number of the companies on the index have traded in the green over the past year, with pharmaceutical firm Sartorius (ETR: SRT) the biggest gainer at 79.31%. Elsewhere, software firm SAP ERP (NYSE: SAP) is the biggest loser in the past year at -13.31%.
Markets emerging from tough September
The plunge comes after the stock market globally suffered one of the difficult months in September, attempting to cope with the slowed growth. Furthermore, the month was also characterized by the Chinese regulatory clampdown alongside concerns regarding the central banks are tapering and fading fiscal stimulus.
Across the EU, inflation surged to the highest level in 13 years due to surging energy prices. Eurozone inflation in September rose 3.4% on an annual basis, the highest reading since September 2008 and up from 3% in August.
Notably, the European market is also concerned with the soaring energy concerns with the region’s respective ministers planning a meeting to discuss the emerging crisis. There are concerns the energy prices could impact the bloc’s recovery.
At the same time, the general European market is also digesting the fallout of the German election that resulted in more uncertainty for the country.