Inflation concerns stoke fear as global markets retreat

European stocks posted their worst daily fall in one week on Wednesday, tracking weakness on Wall Street, as investors grew wary of rising inflationary pressures increasing the odds of an early tightening of monetary policy.

Wall Street’s main indexes also fell for the third straight session , as a steep fall in cryptocurrencies and the inflation fears pushed investors away from riskier assets.

DUBLIN

The Iseq index fell more than 1.5 per cent, in line with declines among its European peers.

Resource stocks fared particularly badly. Kenmare Resources finished down 2.35 per cent to €4.98, while Ormonde Mining slumped 8.3 per cent to a fraction above 1 cent per share. Mincon Group was down by almost 4.5 per cent to €1.28 per share.

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Travel-related stocks were also in the red, as confusion reigned in the UK over whether the government there would proceed with a planned relaxation of travel restrictions for vaccinated Britons. Dalata Hotel Company fell 3.5 per cent to €4.16, while Ryanair was down 1.8 per cent to €16.13.

LONDON

The FTSE 100 fell, dragged down by heavyweight commodity stocks. The blue-chip index fell 1.2 per cent, with miners declining 3.9 per cent after metal prices slipped. Oil majors BP and Royal Dutch Shell slid more than 1 per cent each. The domestically focused mid-cap FTSE 250 index fell 0.4 per cent.

Ferguson climbed 2.2 per cent to hit a record high after the plumbing and heating parts distributor reported a 65.4 per cent jump in its third-quarter profit.

John Laing Group jumped 11.2 per cent after private equity firm KKR agreed to buy the British infrastructure investor in a deal valued at about £2 billion (€2.3 billion).

Publisher Future gained 10.7 per cent after its first-half results beat market expectations.

Pubs found themselves in the spotlight, just two days after indoor service started for the first time in months in England. Marston's reported a £105.5 million pre-tax loss in the last six-month period due to lockdown. The company is currently making sales of around £8 for every £10 it made before the pandemic. Shares fell 5.3 per cent. Mitchells & Butlers, which owns Toby Carvery and All Bar One, reported a £200 million loss. Its shares closed down 1.1 per cent.

EUROPE

The pan-European Stoxx 600 index fell 1.5 per cent, but was trading less than 2 per cent below its all-time high. Miners, travel and technology stocks were the top decliners.

Chip stocks came under pressure, with Dutch companies ASM International and ASML and Germany's Infineon Technologies each down more than 2 per cent on concerns about a global semiconductor shortage.

European banks posted the smallest declines, helped by rising euro zone government bond yields.

A report by the German Economic Institute showed bottlenecks in the supply of raw materials could cost Germany a rapid recovery from the economic impact of the coronavirus pandemic, with two-thirds of the sectors reporting supply constraints. Germany's Dax fell 1.8 per cent and the Cac in France dropped 1.4 per cent.

NEW YORK

Crypto-exchange operator Coinbase Global fell 5.6 per cent, bitcoin bank Silvergate Capital shed 3 per cent and miners Riot Blockchain and Marathon Digital Holdings were down 7.5 per cent and 9 per cent, respectively.

Tesla, which has invested in the digital currency, dropped 4.2 per cent, while payments companies Mastercard, Square and PayPal, which accept crypto payments, fell between 0.6 per cent and 3.2 per cent.

Stimulus cheques helped US home improvement chain Lowe's report better-than-expected quarterly same-store sales growth and Target post a surge in sales. Shares of Lowe's fell 2.3 per cent and Target rose 4.7 per cent.

Take-Two Interactive Software rose 5.2 per cent after reporting quarterly profit and sales above analysts' estimates.

All 11 major S&P sectors dropped, with financials and materials leading declines. The CBOE volatility index, a measure of investor anxiety, jumped 2.5 points to 23.82.

– Additional reporting: Reuters/PA