Volkswacht Bodensee - Global stocks retreat as traders eye more rate hikes

Oil prices fell on concerns high borrowing costs would weigh further on demand, while the dollar gained against major rivals on the prospect of more rate increases.

All three major US indexes ended the day in the red, with analysts noting a sense that the market is due for a pullback after an earlier run.

"Hawkish central banks talk" continues to weigh on markets, said Peter Cardillo of Spartan Capital.

There was mixed macroeconomic news this week, he said, but investors' focus remained on Federal Reserve chief Jerome Powell and the Bank of England, which further tightened monetary policy.

On the other side of the Atlantic, a keenly watched survey showed eurozone economic activity worsened in June to a five-month low, hit hard by a fall in industrial production.

The eurozone entered a technical recession at the start of the year.

Meanwhile, UK private-sector growth slowed to a three-month low in June as soaring interest rates and stubbornly high inflation fuelled by rising food prices worsens a cost-of-living crisis, data showed.

"The key theme in FX (foreign exchange) and across most financial markets this week has unambiguously been this: risk off," said City Index analyst Fawad Razaqzada.

"Weakness in data and very hawkish central banks have revived investor concerns over a hard landing," he added, referring to the fear that economies could face a severe downturn due to rising borrowing costs.

Neil Wilson, chief market analyst at Finalto, said "the mood is changing from inflation risk to growth risk."

Optimism that characterised the first half of June -- fueled by hopes the Federal Reserve was close to ending its hiking cycle -- has given way to concern that the US central bank is planning additional increases to bring down inflation.

In Europe, the Bank of England lifted its key rate on Thursday by more than expected, while Switzerland and Norway also tightened.

These hikes followed rate increases last week in the eurozone, Australia and Canada.

Turkey also hiked rates this week, sharply reversing course on its unorthodox monetary policy by almost doubling borrowing costs after cutting them for two years.

"Global recession concerns are back in the main thanks to a hawkish central bank policy that may have to inflict some economic pain to rein in core inflation," said Stephen Innes at SPI Asset Management.

"In that environment, the current level of risk-free yields makes investing in equities less attractive relative to bonds," he added.

Amid the decline in stock prices in Asia, Europe and the United States on Friday, traders were also keeping an eye on Beijing after a hoped-for raft of stimulus measures for the Chinese economy failed to materialize.

While China's central bank has cut borrowing costs, there has been very little by way of policy detail from officials.

On the corporate front, shares in Siemens Energy plummeted Friday after the company warned that technical problems at its wind turbine unit were worse than thought.

In the US, Goldman Sachs shares fell 1.5 percent after a media report suggested it could face a large write down for a 2021 acquisition of fintech firm GreenSky.

And shares of CarMax ended 10.2 percent higher after reporting better-than-expected results.

- Key figures around 2030 GMT -

New York - Dow: DOWN 0.7 percent at 33,727.43 points (close)

New York - S&P: DOWN 0.8 percent at 4,348.33 points (close)

New York - Nasdaq: DOWN 1.0 percent at 13,492.52 points (close)

London - FTSE 100: DOWN 0.5 percent at 7,461.87 (close)

Frankfurt - DAX: DOWN 1.0 percent at 15,829.94 (close)

Paris - CAC 40: DOWN 0.6 percent at 7,163.42 (close)

EURO STOXX 50: DOWN 0.8 percent at 4,271.61 (close)

Tokyo - Nikkei 225: DOWN 1.5 percent at 32,781.54 (close)

Hong Kong - Hang Seng Index: DOWN 1.7 percent at 18,889.97 (close)

Shanghai - Composite: Closed for holiday

Euro/dollar: DOWN at $1.0896 from $1.0959 on Thursday

Pound/dollar: DOWN at $1.2717 from $1.2748

Dollar/yen: UP at 143.74 from 143.11 yen

Euro/pound: DOWN at 85.66 pence from 85.95 pence

West Texas Intermediate: DOWN 0.5 percent at $69.16 per barrel

Brent North Sea crude: DOWN 0.4 percent at $73.85 per barrel

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J.Fankhauser--BTB