Europe, UK stock markets see steep decline amid concerns over inflation, slow growth

Sharp falls in the US and Asian stock markets had reverberations across UK and Europe amid concerns over inflation and slowing economies.

The FTSE 100 index of leading companies sank 1.8 per cent on Thursday while the main stock markets in France and Germany also saw massive drops, BBC reported.

This came a day after US shares recorded their biggest one-day drop on Wednesday since the early days of the Covid pandemic in 2020.

On Wall Street, the Dow Jones Industrial Average fell 3.56 per cent, the S&P 500 lost 4.03 per cent and the Nasdaq Composite dropped 4.73 per cent, reports Reuters.

The declines for the S&P 500 and Dow marked their biggest one-day percentage declines since June 11, 2020.

Apart from that, UK recording a massive 9 per cent inflation in April—a 40-year high— spooked the European markets, raising concerns that some economies are heading for a slowdown as interest rates are increased in an attempt to counter price rises.

British inflation is now the highest among major economies in Europe, but prices are rapidly rising worldwide, forcing central banks around the globe to hike interest rates and tamp down growth as suggested by a modest decline in US homebuilding in April

The UK's biggest retailer, Tesco, fell 1.8 per cent while shares in consumer goods giant Unilever dropped nearly 1 per cent.

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The biggest fall on the UK market was Royal Mail, which sank more than 12 per cent after reporting disappointing results and warning it was facing "significant headwinds" from rising costs.

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The FTSE 100 closed 135 points lower at 7,302.7, while France's Cac-40 index and Germany's Dax dropped by 1.3% and 0.9% respectively.

In Asia, Japan's benchmark Nikkei index closed down 1.9 per cent while Hong Kong's Hang Seng dropped 2.5 cent

(With inputs from agencies)

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