European shares continued to slump on Thursday as fears of a sooner-than-expected tapering in global monetary policy and a sharp fall in commodity prices dampened investor sentiment.
The pan-European Stoxx 600 was down 1.78% with all major regional bourses on the slide. France’s CAC 40 plunged 2.78%, while the UK’s FTSE 100 was 2.41% lower.
Minutes published on Wednesday of the US Federal Reserve’s latest policy meeting suggested it was set to rein in its massive stimulus programme as the spectre of rising inflation started to concern policymakers.
“Markets took another glancing blow as the Federal Reserve minutes revealed that tapering is edging ever nearer,” said interactive investor head of markets Richard Hunter.
“While no date has yet been confirmed, there is an increasing split within its members and it appears increasingly likely that the taper will begin before the end of the year.”
“Alongside some mixed retailer results, the unrest in Afghanistan and an apparently weakening Chinese economy, this has been a week to test the mettle of investors.”
In equity news, miners were hit by the fall in commodity prices, with BHP, Anglo American and Antofagasta all down, with the latter also cutting annual production guidance.
Shares in Swiss building materials supplier Geberit fell as the company warned about rising raw materials prices after reporting a big leap in quarterly sales and earnings.
Shares in Danish hearing aid and audio company GN Store Nord plunged 8.5% after it missed second-quarter sales expectations.
Sales rebounded in April-June after being hit badly by the pandemic a year earlier, but GN – a major supplier of hearing aids to U.S. war veterans – said coronavirus lockdown measures had still prevented some veterans and other potential customers from physically visiting hearing specialists.
On the positive side, Swedish heat pump maker Nibe topped the Stoxx with a rise of 8.4% as it posted a rise in annual earnings.