Stocks fell across Europe on Tuesday as Nasdaq futures tumbled more than 1%, with rising U.S. inflation concerns spooking investor sentiment.
The pan-European Stoxx 600 SXXP,
Dow industrials futures YM00,
Every constituent of the three major stock market indexes in London, Paris, and Frankfurt was in the red in early trading. Stocks in Europe, as well as Asia, followed Wall Street’s move lower on Monday, led down by the tech-heavy Nasdaq COMP,
“Once again it has been concern about inflation that appears to be weighing on broader market sentiment, with commodity prices once again the major culprit, ahead of U.S. CPI numbers that are due out later this week,” said Michael Hewson, an analyst at CMC Markets.
Investors will be closely watching the headline U.S. inflation figure — the Consumer Price Index, or CPI — when it is released on Wednesday. Hewson expects to see “a big rise” in this key measure.
“It seems that investors are now fretting about rising prices and sharply higher inflation again,” Hewson said. “The big question is whether they are right to be, and while we’ve seen sharply higher prices in the latest ISM [Institute for Supply Management] surveys and commodity prices are also on a tear, the bigger concern is whether they are likely to be temporary, or much more persistent. In the short term, it is probably too early to know.”
There was a particular weakness in companies exposed to commodity prices — especially miners and major oil companies — as well as tech groups and travel stocks in Europe.
The London-listed miners Rio Tinto RIO,
Tech companies were also battered, including Dutch semiconductor group ASML ASML,
In travel stocks, airlines International Airlines Group IAG,
But British e-commerce player The Hut Group THG,
Shares in battery manufacturer Invinity Energy Systems IES,