Business

European Stocks Close Lower as Inflation Fears Rattle Global Markets; Stoxx 600 Down 1.4%

Simon Dawson | Bloomberg | Getty Images

Shoppers walk past a Gap Inc. clothing store in London, U.K., on Thursday, May 25, 2017.

  • The negative trade for European stocks comes after regional markets closed lower on Wednesday as fears over inflation rattled markets on both sides of the Atlantic.
  • The Dow Jones Industrial Average saw its biggest loss since 2020 on Wednesday after major retailers warned of rising cost pressures, confirming investors' worst fears over rising inflation.

LONDON — European stocks declined on Thursday as global markets were rattled by fears over rampant inflation.

The pan-European Stoxx 600 closed down 1.4%, with food and beverages shedding 3.6% to lead losses as all sectors and major bourses slid into negative territory.

The negative trade for European stocks came after regional markets closed lower on Wednesday as concerns over inflation roiled markets on both sides of the Atlantic.

U.K. data showed inflation soared to a 40-year high of 9% in April as food and energy prices spiraled, official figures revealed Wednesday, escalating the country's cost-of-living crisis.

Stateside on Wednesday, the Dow Jones Industrial Average saw its biggest loss since 2020 after major retailers warned of rising cost pressures, confirming investors' worst fears over rising inflation.

Stocks and other risk assets have been pressured by inflation and the Federal Reserve's attempt to tamp down price increases through rate hikes, which have led to concerns about a potential recession.

Overnight, most Asia-Pacific markets fell sharply on Thursday after the heavy losses on Wall Street. The S&P 500 also fell again on Thursday, pushing the average to the brink of a bear market.

Earnings in Europe came from Julius Baer and easyJet before the bell.

In terms of individual share price movement, HomeServe jumped more than 10% to lead the Stoxx 600 after the British home repair services firm agreed its sale to Canada's Brookfield Asset Management for $5 billion.

At the bottom of the European blue chip index, Royal Mail plunged more than 12% after missing profit expectations and flagging plans for more cost cuts.

Copyright CNBCs - CNBC