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European and Asian stocks drop as inflationary questions mount

Stock markets fell across Europe and Asia following the fall on Wall Street as rising energy prices accelerated concerns over prolonged inflation and central bank monetary tightening.

The Stocks Europe 600 Index opened 1.2% lower, 5% below the all-time high reached in mid-August. London’s FTSE 100 fell 1.1% and Germany’s Xetra Dax fell 1.2%.

In Asia, China’s CSI 300 fell 1.1%, with utilities stocks falling the most. Power shortage Driven by Lack Proper coal supply. Tokyo’s Nikkei 225 fell 0.9% as utility stocks fell alongside high-value technology stocks that were vulnerable to rising US interest rates.

Mary Bateman, Senior Strategist at State Street Global Markets, said: “I don’t think it will be gone soon.”

“Current rising energy prices will be disproportionately negative for the euro area. [economic] Nick Andrews of research firm Gavekal said the block is a net importer of fuel.

The move ends a low volatile session on Monday after West Texas Intermediate oil hits a fresh seven-year high of $ 82 a barrel before being pulled back to $ 80.55 on Tuesday morning. Continued from the index. Brent crude, the international oil benchmark, remained at $ 83.76, the highest in three years.

Data released Wednesday show that US consumer prices in September rose 5.3% from the same period last year, and headline inflation in the world’s largest economy exceeded 5% for the fourth straight month. It has been.

Rising energy prices mean that the price pressures initially caused by supply chain bottlenecks when the industry resumes from a coronavirus shutdown are not temporary and impair return on investment, corporate profits and personal consumption. There is growing concern that it will become.

Investors are now likely to scrutinize a company’s third-quarter earnings report for signs that inflation is causing such a slowdown.

The Federal Reserve Board has already shown that it is ready to cut $ 120 billion in monthly bond purchases for pandemics. Half of interest rate setters predict that interest rates will rise next year, while the market is betting on the Bank of England to raise borrowing costs. Before Christmas..

Yields on 10-year Treasuries, which are inversely proportional to debt prices and set the tone for borrowing costs and equity valuations around the world, were stable at 1.6%, the highest since early June. Germany’s comparable Bund yield was flat at minus 0.128%, close to its highest since May.

The dollar index, which measures the US dollar against the other six companies, remained flat at 94.2 points, approaching the strongest point of the year.

European and Asian stocks drop as inflationary questions mount Source link European and Asian stocks drop as inflationary questions mount

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