European equities: Stock exchanges resume slump

PARIS / LONDON (dpa-AFX) - The stabilization of the great European stock marketMidweek n was short lived. On Thursday the descent continued with renewed momentum. The significant rise in inflation in the USA and the associated interest rate fears were the trigger: The unexpectedly sharp rise in consumer prices in the world's largest economy had put Wall Street and the Nasdaq stock exchanges under further pressure on Wednesday, and this morning also brought heavy losses to Asia Stock markets.

The EuroStoxx 50 joined the trend and fell by 1,68 percent to 3881,08 points, the lowest level since the end of March. The Parisian Cac 40 lost 1,37 percent to 6193,10 points. The London FTSE 100 fell by 2,12 percent to 6856,57 points.

“Investors are more nervous than they have been for a long time,” wrote portfolio manager Thomas Altmann from QC-Partners, referring to the significant increases in volatility indices. These are often referred to colloquially as the “fear barometer of the capital markets”. The higher they go, the greater the nervousness.

After the unexpectedly strong rise in inflation in the USA - the rate in April had risen by 4,2 percent year-on-year and thus more strongly than it has been since September 2008 - the central banks are now playing an even more important role, Altmann explained. Because speculation about earlier tightening of US monetary policy is increasing.

Michael Hewson from CMC Markets recalled that the high rise in inflation was largely due to a statistical base effect. The pandemic had largely caused the price dislocations. He therefore believes investors' concerns are premature. Until the publication of US producer prices in the USA this afternoon, there is unlikely to be any recovery in the markets.

Across industries there were losses, starting with the relatively stable pharmaceutical sector with minus 0,3 percent up to the most heavily burdened sectors Automobiles & Parts and Basic Resources, which plummeted by 2,9 percent and 3,8 percent.

Among the individual values, Danone was the only value in the EuroStoxx that was positive. They rose by 0,1 percent, because the food company wants to distribute a large part of the income of around 1,6 billion euros, which was achieved through the sale of a minority stake in Mengniu, through share buybacks.

Among the few stocks that were able to come up with price gains on that day were those of Telefonica in Madrid with a plus of 1,0 percent. The Spanish telecom group convinced with its quarterly figures. JPMorgan and Goldman Sachs noted that first quarter operating income was better than expected.

BT Group or Burberry mostly disappointed with their financial year figures. For example, the British telecommunications company BT lost 4,3 percent after it announced an operating profit that was somewhat weaker than generally expected. Burberry sagged 8,7 percent. Market watchers said the luxury goods maker had disappointed with its forecast for operating margin in fiscal year 2021/22.

According to an interim report, Rolls-Royce fell 1,4 percent over the past four months.