European stocks slid Thursday, as investors played catch up to heavy selling on Wall Street sparked by surging consumer price inflation. U.S. stock futures indicated more selling was ahead.
Tracking losses across Asia and the U.S., the Stoxx Europe 600 index SXXP,
Dow Jones Industrial Average YM00,
Investors got spooked by a report showing U.S. inflation in the year to April climbed at its fastest pace in roughly 13 years, sparking fears of an overheating economy. More data is ahead for Thursday, with producer prices for April and weekly jobless claims.
“You may get dull periods but this year is going to be a big battle between the bullishness of mass reopening/stimulus on one hand and the inflationary consequences on the other. Expect regular pockets of vol [volatility],” said a team of Deutsche Bank strategists led by Jim Reid, in a note to clients.
Rising energy prices were a contributor to that U.S. inflation spike, though crude was down on Thursday, with crude CL.1,
U.S. gasoline RBM21,
Mining stocks fell in step with weak iron ore prices. Shares of Rio Tinto RIO,
Shares of Burberry BRBY,
“A weak wider market and some elements of profit taking have made for an ugly start for the shares in response to the results. While this update will reassure bulls of the stock, given the recent strength of the price performance, the shares are seen as being up with events for now, with the market consensus coming in at a hold,” said Richard J Hunter, head of markets at interactive investor.