Euro Zone's Economic Turbulence: Sharp Downturn in Business Activity

The euro zone's business activity has sharply declined, with both the services and manufacturing sectors contracting. The Purchasing Managers' Index hit a 10-month low, sparking concerns about economic stability. Political uncertainties in Germany and France exacerbate the downturn amidst expectations of further interest rate cuts by the ECB.

The euro zone's business activity has experienced an unexpected and significant decline, with the services industry contracting and the manufacturing sector sinking deeper into recession, according to a recent survey. The HCOB's preliminary composite euro zone Purchasing Managers' Index by S&P Global dropped to a 10-month low in November.

Unsettling news from the survey put pressure on euro zone policymakers, as both manufacturing and service sectors report faltering demand, significantly impacted by weak international markets. The composite new business index fell to its lowest this year, indicating no immediate signs of recovery.

Economic challenges are compounded by political instability in key regions, such as Germany, where a coalition collapse forebodes uncertainty. With expectations of further interest rate cuts by the European Central Bank, there's a heightened sense of apprehension regarding the euro zone's economic health.

(With inputs from agencies.)