European stocks closed sharply lower on Wednesday as rising concerns about inflation raised fears that global central banks might consider tightening their easy monetary policies sometime soon.
The yields on Euro area government bonds rose on concerns the European Central Bank could decide to scale back its emergency bond-buying program as early as next month.
A sharp plunge of the cryptocurrencies including the bitcoin, and worries about a surge in coronavirus cases in Asia further dented sentiment. Bitcoin, the world’s largest cryptocurrency, tanked by close to 40% from its record high levels to US $31,000 on Wednesday, hitting its lowest level since February.
Investors also awaited the release of the Federal Reserve’s most recent policy meeting.
The pan European Stoxx 600 slid 1.51%. The U.K.’s FTSE 100 shed 1.19%, Germany’s DAX declined 1.77% and France’s CAC 40 ended 1.43% down, while Switzerland’s SMI closed lower by 0.87%.
Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Ireland, Netherlands, Norway, Poland, Portugal, Russia, Spain and Sweden closed with sharp to moderate losses.
Iceland and Turkey ended modestly higher.
In the UK market, Anglo American, BHP Group, Antofagasta, Rio Tinto, Glencore, Royal Dutch Shell, BP, Intercontinental Hotels, Melrose Industries and CRH lost 2 to 5%.
On the other hand, Ferguson rose sharply as the British plumbing and heating products supplier raised annual guidance after reporting strong revenue growth in its third quarter. Imperial Brands, Polymetal International, DCC and BT Group also posted strong gains.
Shares of infrastructure investment group John Laing climbed more than 11%, after private equity firm KKR announced that it had agreed to buy the company for £2 billion ($2.84 billion).
In the French market, ArcelorMittal, Renault, Faurecia, Total, Publicis Groupe, Bouygues, Safran, Sodexo, Credit Agricole, Air France-KLM, BNP Paribas and Airbus Group lost 2 to 5%.
In Germany, Infineon Technologies shares tumbled on concerns about a global semiconductor shortage and disruption of supply chains due to COVID-19.
Siemens, HeidelbergCement, Daimler, Deutsche Telekom, BASF, Infineon Technologies, BMW, Volkswagen, Deutsche Bank and Bayer ended sharply lower.
Data from Eurostat showed euro zone inflation accelerated as expected in April because of a sharp rise in the costs of energy and services. The data said consumer prices in the 19 countries sharing the euro rose 0.6% sequentially and 1.6% from a year earlier, up from the 1.3% annual increase in March.
U.K. consumer price inflation exceeded expectations in April on higher energy prices, separate data showed, with prices advancing 1.5% year-on-year in the month, more than double the 0.7% rise seen in March. A similar higher rate was last seen in March 2020.
European new car registrations rose 24.4% year-on-year in the January to April period to 3.4 million units due to the low base of comparison amid coronavirus restrictions, data from the European Automobile Manufacturers Association/ACEA showed.
Market Analysis
European Stocks Close Sharply Lower As Inflation Concerns Weigh
2021-05-19 18:04:43
