Inflation Fears Rout Global Equity Markets
Sumaira FH 1 month ago Wed 12th May 2021 | 08:30 AM
London stocks dived over 3.0 percent at one point before recovering some ground to close 2.5 percent lower.
Paris fell 1.9 percent and Frankfurt 1.8 percent.
Wall Street stocks also retreated, although the Nasdaq finished almost flat following a wave of bargain-hunting.
Traders are fearful that surging inflation could force the world's central banks to wind back ultra-loose monetary policies earlier than forecast and damage the post-Covid recovery.
That is due to a rally in commodity prices -- particularly widely used copper and iron ore -- which has markets concerned that costs will spiral.
"Investors do appear to be freaking out a little bit over the recent sharp rise in commodity prices that we've seen in the past few weeks," said Hewson.
The yield on the 10-year US Treasury rose back above 1.6 percent, a move typically reflecting concerns about rising prices.
"This is a cutting of the fat," O'Hare said. "It's also a reminder that valuation always matters." All eyes are now on the release this week of crucial data on US retail sales and consumer prices, with expectations for a sharp rise as the world's top economy reopens and vaccines allow people to return to normal life.
"Inflation is what keeps investors up at night," said Swissquote analyst Ipek Ozkardeskaya.
"And the latest Chinese figures did not help soothing investors' nerves," she added.
- Key figures around 2050 GMT - New York - Dow: DOWN 1.4 percent at 34,269.16 (close) New York - S&P 500: DOWN 0.9 percent at 4,152.10 (close) New York - Nasdaq: DOWN 1.0 percent at 13,389.43 (close) London - FTSE 100: DOWN 2.5 percent at 6,947.99 (close) Frankfurt - DAX 30: DOWN 1.8 percent at 15,119.75 (close) Paris - CAC 40: DOWN 1.9 percent at 6,267.39 (close) EURO STOXX 50: DOWN 1.9 percent at 3,946.06 (close) Tokyo - Nikkei 225: DOWN 3.1 percent at 28,608.59 (close) Hong Kong - Hang Seng Index: DOWN 2.0 percent at 28,013.81 (close) Shanghai - Composite: UP 0.4 percent at 3,441.85 (close) Euro/dollar: UP at $1.2148 from $1.2129 at 2100 GMT Pound/dollar: UP at $1.4140 from $1.4118 Euro/pound: FLAT 85.91 pence Dollar/yen: DOWN at 108.62 Yen from 108.81 yenBrent North Sea crude: UP 0.3 percent at $68.55 per barrelWest Texas Intermediate: UP 0.6 percent at $65.28 per barrel