European, Asian stocks slide as inflation fears take hold

LONDON: European and Asian stock markets retreated Thursday as rising inflation fears offset optimism about the re-opening of virus-hit economies, traders said.

Wall Street opened mixed, with the tech-heavy Nasdaq falling further after tumbling 2.7 percent on Wednesday.

The growing belief is that in the coming months, a spending splurge from pent-up consumers exiting lockdowns -- and a huge imminent US stimulus package -- will light a rocket under prices.

This in turn could force central banks to wind back ultra-easy monetary policies -- including record-low interest rates -- that have been a key driver of the surge in stocks markets.

All eyes will be on US Federal Reserve chief Jerome Powell when he speaks later Thursday, for his latest take on a rise in US Treasury bond yields, a crucial guide of future rate expectations, to one-year highs in recent weeks.

The focus is also on OPEC, which along with other key oil producers, is Thursday expected to raise output in response to a rebound in demand and prices.

Crude futures were trading higher ahead of the decision.

"Bond yield concerns are back to haunt investors," said Sophie Griffiths, market analyst at Oanda trading group.

"The market hasn't been able to shake off rising bond yield concerns despite reassurance from Federal Reserve chair Jerome Powell that any tightening in policy was still a long way off."

After a strong performance Wednesday, Asian stocks were back in the red. Tokyo, Hong Kong and Shanghai all closed down more than two percent.

European stocks were modestly lower in afternoon trading.

On Wall Street, the Dow and broader S&P 500 posted modest gains despite disappointing jobs data.

US first time unemployment insurance claims rose modestly last week to 745,000, according to government data released on Thursday, defying expectations for a drop.

"The key takeaway from the report is that it is still stunning how high initial jobless claims are," said Briefing.com analyst Patrick J. O'Hare.

The data follows a report Wednesday showing a disappointing low number of jobs were created in February as the country was slammed by a severe freeze.

US senators are due to start debating Biden's stimulus, with the president giving way on some demands from moderate Democrats to put a cap on the number of people getting a $1,400 cash handout to remove high earners.

The decision, analysts say, could reduce the cost of the rescue package but it would still likely be more than $1.5 trillion.

On the corporate front, takeaway meals app Deliveroo said it had chosen London for its stock market listing, a major boost for the capital's financial sector which has been roiled by Brexit.

Deliveroo, in line with other home-delivery companies, has seen demand soar in the past year owing to lockdowns during the coronavirus pandemic.

No date has been set for the initial public offering (IPO), with the group already valued at more than $7.0 billion (5.8 billion euros).

Key figures around 1430 GMT -

London - FTSE 100: DOWN 0.4 percent at 6,646.70 points

Frankfurt - DAX 30: DOWN 0.2 percent at 14,050.78

Paris - CAC 40: DOWN less than 0.1 percent at 5,826.89

EURO STOXX 50: DOWN 0.2 percent at 3,705.33

New York - Dow: UP 0.2 percent at 31,346.15

Tokyo - Nikkei 225: DOWN 2.1 percent at 28,930.11 (close)

Hong Kong - Hang Seng: DOWN 2.2 percent at 29,236.79 (close)

Shanghai - Composite: DOWN 2.1 percent at 3,503.49 (close)

Euro/dollar: DOWN at $1.2034 from $1.2071 at 2100 GMT

Pound/dollar: UP at $1.3974 from $1.3954

Euro/pound: DOWN at 86.13 pence from 86.41 pence

Dollar/yen: UP at 107.45 yen from 106.96 yen

Brent North Sea crude: UP 1.9 percent at $65.26 per barrel

West Texas Intermediate: UP 1.8 percent at $62.57 per barrel