Global equities are falling as inflation frightens investors

Shares fell across Europe and the Asia-Pacific on Thursday as Wall Street traded around the world on the stock market for fears of U.S. inflation in the previous session.

The European Stoxx 600 index fell 0.8 per cent in first trades, while the UK FTSE 100 fell 1.3 per cent.

The Japanese Topix closed 1.5 percent lower, with weekly losses rising to 4.4 percent. The CSI 300 index of China’s listed stocks Shanghai and Shenzhen fell 1.2 percent. All other major Asian lessons were also in red.

The losses occurred after official U.S. data was shown inflation rose 4.2 percent year-on-year in April, prices rose at a faster pace than economists had predicted.

Reading terrifying markets, As the S&P 500 closed 2.2 percent, the worst performance of the day that has benchmarked Wall Street since February.

Higher inflation forecasts could depress the equity and debt markets by lowering real returns on dividends or fixed interest payments, leading to lower stock and bond prices.

The 10-year U.S. Treasury yield, which is moving in the opposite direction of the price, rose in New York trading on Wednesday before stabilizing at 1.674 percent in the first session of Europe, down 0.03 percentage points.

Wednesday’s data has heightened speculation that the U.S. Federal Reserve, the world’s most powerful central bank, could speed up the $ 120 billion bond buyback period that has plagued financial markets since last March.

A senior Federal Reserve official has reduced inflation risks this week. “transient wave”.

“The Fed’s insistence that inflation is only transient for the audience,” said Tai Hui, chief market strategist for JPMorgan Asset Management in Asia. “But if inflation data doesn’t calm down in the coming months, it could be a confusing challenge for credibility.”

Shares of technology in the U.S. were hit hard, with the Nasdaq falling 2.7 percent. They also weakened in Europe and Asia. The valuation of the sector increased during the pandemic when houses were locked and socialized online shopping, but today they are particularly weak for market correction.

In Hong Kong, Tencent and Alibaba fell more than 2 percent. The Tokyo-listed technology conglomerate SoftBank lost 2.7 percent maximum yield recorded days earlier for a Japanese company. Stoxx’s technology subscription fell 1 percent.

Taiwan’s Taiex technology index fell to 3.4% before matching most of these losses. It also has country benchmarks has suffered this week In the recovery of Covid-19.

Data on U.S. inflation was passed on globally commodity prices have jumped, due to high demand and tight supply. Investors also see it as a hedge against inflation. Iron ore prices hit a record high in dollars on Monday.

The rise in commodity prices boosted the Chinese producer’s price index – a measure of inflation at factory doors. the highest level in three years in April, growth in the country’s consumer price index remained below 1 percent.

On Thursday, iron ore and crude oil, among others, fell. Brent’s international crude oil benchmark fell 1.4 percent to $ 68.33 a barrel. The US Colonial Pipeline, which transports fuel across the country, operations resumed after being shut down by a cyber attack last Friday.

Gold rose 0.2 percent to 1,819.76 troy ounces.