European stocks close lower on rising fears over monetary tightening

By Anisha Sircar and Amber Warrick

Jan 14 (Reuters) – European stocks fell on Friday after comments from central bank officials raised concerns about the impact of tighter monetary policy, while France’s EDF slumped as the government intervened to curb prices of electricity.

* The pan-European STOXX 600 Index lost 1.0%, at the same time that it marked its worst week since the end of November.

* European Central Bank President Christine Lagarde said the bank is ready to take the necessary steps to bring inflation down to its 2% target, raising the stakes on a rate hike this year.

* ECB Vice President Luis de Guindos also warned that rising inflation in the euro zone is not as transitory as previously thought.

* Tightening monetary conditions will end pandemic-era liquidity measures, which flooded the market with cash and pushed stocks to record highs in 2021.

* Energy group EDF plunged 14.6% to the worst performance in the STOXX 600 after France ordered the state-owned company to sell more cheap nuclear power to smaller competitors to limit rising electricity prices in the country.

* Almost all sectors and regional stock indices were in the red on Friday. Retailers were the worst performers during the day, while oil companies were the only winners.

* Industrial goods were the worst performing European sector this week, down 3.8% as investors worried about supply chain issues affecting production. Meanwhile, strong oil prices sent oil and gas stocks outperforming their peers this week with a 4.6% jump.

(Report by Anisha Sircar in Bengaluru, Edited in Spanish by Manuel Farías)