European shares continued their retreat on Thursday as a rapid rise in US inflation and falling commodities prices hammered sentiment.
The pan-European Stoxx 600 index was down 1.37% as mining stocks fell out of favour, with a stronger dollar also deterring investors. A bigger-than-expected jump in US the April headline consumer prices index to 4.2%, the largest rise since 2008, sparked big losses for Wall Street stocks overnight.
“There is as yet no end to the selling … after struggling to hold their ground following US CPI data yesterday, markets are bracing themselves for PPI data this afternoon,” said IG analyst Chris Beauchamp.
“For stocks this might be an even tougher moment, given that companies may find themselves struggling to pass on price increases to customers, hitting profitability and putting the year-long earnings recovery in jeopardy.”
In equity news, shares mining heavyweights BHP, Anglo American, Rio Tinto and Glencore were all off by more than 4%.
UK luxury brand Burberry fell 8% as the firm reported a 10% drop in annual sales due to the Covid-19 pandemic.
UK telecoms and broadband provider BT Group was also lower as it reported a 7% fall in revenue and a 6% fall in annual adjusted earnings.
Hargreaves Lansdown shares were lower despite the financial services group reporting record new business in the first four months of 2021 as people invested savings amassed during the pandemic into the stock market.
Spanish firm Telefonica bucked the trend and saw its shares up 3% as it reporting a slowing in revenue declines in the first quarter.
