Major stock markets across Europe and Asia nosedived on Wednesday, a day after a report showing stubbornly high price growth in the US prompted a selloff on Wall Street.
The pan-European Stoxx 600 was down 0.5% by 10:50 GMT, extending losses from the previous day. Food and beverage stocks were the hardest hit, shedding 1.3%.
Germany’s DAX dropped 0.47%, while France’s CAC 40 was down by 0.33%. The FTSE 100 index in London was trading 0.85% lower.
US stocks tanked on Tuesday, logging their worst day since June 2020, after a key August inflation report came in hotter than expected, hurting investor optimism for cooling prices and a less aggressive Federal Reserve. The US Consumer Price Index, which covers key goods and services, jumped 0.1% from July, versus economists’ projections of a 0.1% drop. Annual inflation eased for the second straight month but also remained stubbornly high, with prices up 8.3% year-on-year.
The lackluster US inflation data caught markets in Asia “completely off guard” as well, according to the regional head of Asia-Pacific research at ING, Robert Carnell, as quoted by CNBC.
Japan’s Nikkei sank 2.78% on Wednesday, while South Korea’s Kospi lost 1.56%. Chinese markets were also down, with the benchmark Shanghai Composite index sliding 0.8% and Hong Kong’s Hang Seng losing 2.5%.