European markets: Inflation, rates, fears of growth

LONDON – European markets fell on Friday, following their US and Asian counterparts as global equities start the fourth quarter down.

The pan-European Stoxx 600 fell 1% at the start of trading as banks shed 1.8% to cause losses as nearly all sectors and major exchanges slipped into negative territory.

Asia-Pacific stocks also suffered in Friday’s trading, with Japan’s Nikkei 225 falling more than 2.5% to lead the losses. Mainland China and Hong Kong markets were closed for public holidays.

In the US, US futures showed opening losses on Wall Street early in pre-market trading after the S&P 500 suffered its worst month since March 2020.

Global markets have been rocked by fears of persistently high inflation, slower growth and rising rates.

All eyes will be on the inflation numbers expected later today.

The rapid inflation estimate for the eurozone is due at 10 a.m. London time. Meanwhile, in the United States, the basic personal consumption expenditure price index, the Federal Reserve’s preferred policy stance measure, is expected to rise 0.2% in August and 3.5% in August. year.

Eurozone finance ministers will meet on Monday to discuss the economic fallout from soaring energy prices, fearing it will affect the bloc’s recovery and disproportionately affect the poorest.

In Germany, the conservative CDU-CSU bloc is due to hold coalition talks with the Free Liberal Democrats (FDP) on Sunday, Reuters reported Thursday citing CDU-CSU sources. The Tory bloc narrowly lost to the center-left Social Democratic Party (SDP) in federal elections last weekend, but both sides are seeking alliances with other parties in hopes of forming a government coalition.

In business news, BMW on Thursday raised its annual profit forecast in an ad hoc press release to between 9.5% and 10.5%, up from 7% to 9%. The German automaker said the price hike was outweighing the effects of the global semiconductor shortage and other supply chain issues.

British pub chain JD Wetherspoon announced its results on Friday morning, while Daimler and Credit Suisse both held extraordinary general meetings.

On the data front, German retail sales climbed 1.1% month-on-month in August, official figures revealed on Friday, slightly below Reuters consensus forecast of 1.5%.

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