European stock markets slumped Friday, starting the fourth quarter on a weak note on concerns rising inflation will prompt central banks to withdraw stimulus just as growth slows.
At 3:25 AM ET (0725 GMT), the DAX in Germany traded 1.1% lower, the CAC 40 in France fell 1% and the U.K.’s FTSE 100 dropped 0.8%.
These losses followed on from weakness in Asia earlier Friday, with the Nikkei index in Japan dropping more than 2%, while markets in Hong Kong and mainland China were closed, and on Wall Street overnight, with the blue-chip Dow Jones falling more than 500 points or 1.6%.
The disappointing news continued Friday, as German retail sales rose 1.1% on the month in August, a rebound from the revised 4.5% drop the previous month but below the 1.5% increase expected.
Incorporate news, Daimler stock fell 2.6% as shareholders vote on potentially spinning off its truck-making division from its Mercedes-Benz luxury car operations. A similar move by Volkswagen, down 2.2%, two years ago has done little to unlock additional value in its truck business Traton.
U.K. retail stocks suffered more than most, as investors priced in the likely hit to consumer spending from a tightening of fiscal policy as the government withdraws many of its pandemic-era supports. AO World stock fell 17% after its half-year update showed sales growth slowing to a crawl, while fast-fashion group Boohoo fell 2.1% to an 18-month low and rival ASOS fell to a 16-month low. JD Sports Fashion stock fell 4.3%.
Global markets have been unnerved by persistently high inflation while growth appears to slow and central banks look to withdraw their accommodative monetary policies.
The FTSE MIB climbed Down by 0.85% to 25,466.20. In the cash markets, the DAX Germany was trading Down 0.75% to 15,145.65. CAC 40 in France fell by 0.74% to 6,471.37 while the FTSE 100 in the U.K. was down by 0.92% to 7,021.35. , at the time of writing.