Investors dumped shares on Thursday after a biggerthanexpected rise in U.S. inflation spooked Wall Street and sent bond yields surging, with European stocks mirroring losses in Asia.
The Euro STOXX 600 fell 1.5, with indexes in Germany and Britain both slumping 1.9 as investors worried the U.S. Federal Reserve might move early on tightening its ultraloose monetary policy.
Basic resources and oil and gas sectors, among the recent top gainers on the back of a surge in commodity prices, fell over 2.
Inflation pressures are going to be rising, and theyre not going to be temporary, said Jeremy Gatto, investment manager at Unigestion. What does that mean? Effectively that rates will be rising.
The MSCI world equity index, which tracks shares in almost 50 countries, fell 0.6 and was on course for its fourth straight day of losses.
Wall Street was blindsided on Wednesday when data showed U.S. consumer prices jumped by the most in nearly 12 years in April as booming demand amid a reopening economy met supply constraints at home and abroad.
The jump, which sparked the SP 500s worst oneday drop since February, was largely due to outsized increases in airfares, used cars and lodging costs, all driven by the pandemic and likely to prove transitory.
Fed officials were quick to play down the impact of one months numbers, with vice chair Richard Clarida saying stimulus would still be needed for some time.
Yields on 10year Treasuries steadied at 1.68, having climbed 7 basis…