By Peter Nurse
Investing.com - European stock markets traded sharply lower Thursday, continuing the global selloff with investors unnerved by fears over widespread inflation and a potential global economic slowdown.
European equities have followed on from weakness in Asia earlier Thursday and after a dramatic selloff on Wall Street overnight, with the blue-chip Dow Jones Industrial Average dropping over 1,100 points, or 3.6%, its biggest one-day loss since 2020.
Federal Reserve Chairman Jerome Powell warned earlier this week that the U.S. economy could be hurt by attempts to reduce inflation, and a number of major U.S. retailers have posted disappointing quarterly earnings, warning of rising cost pressures, confirming investors’ worst fears over rising inflation.
Back in Europe, easyJet (LON: EZJ ) stock rose 1.4% after the budget carrier posted a smaller loss than expected in the first half of its fiscal year, adding that it expects to fly 90% of pre-pandemic capacity in the third quarter but warned that it still can’t give guidance for the full year.
Assicurazioni Generali (BIT: GASI ) stock rose 0.8% after the Italian insurer posted a 9.3% drop in first-quarter net profit year-on-year, a smaller than expected fall after recording impairments on its Russian investments.
Credit Suisse (SIX: CSGN ) stock fell 2.5% after the beleaguered Swiss lender received its second ratings downgrade of the week, with Fitch following Standard & Poors in downgrading the bank’s long-term issuer default rating to BBB+ from A-.
Elsewhere, the minutes from the latest European Central Bank meeting are due for release later in the session, with investors looking for clues for a potential timetable for monetary policy tightening.
Oil prices stabilized Thursday after the previous session’s losses.
Data from the Energy Information Administration , released late Wednesday, showed U.S. crude oil inventories fell 3.4 million barrels for the week ended May 18, an unexpected drawdown, suggesting substantial demand.
Oil prices have generally been rising as Russian supply is squeezed by bans from several countries in the wake of the invasion of Ukraine.
The European Union has also proposed a phased total ban on Russian oil imports in six months' time, although these measures have yet to be adopted amid opposition from some eastern countries, including Hungary.
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