LONDON, Oct 6: European stock markets slid sharply on Thursday, in the wake of large Wall Street losses owing to concerns that higher interest rates in the United States could brake global economic growth, dealers said.
Worries that higher US inflation would lead to high borrowing costs also weighed heavily on Asian markets.
London’s FTSE 100 index fell 1.15 per cent to 5,365.60 points, the Frankfurt DAX 30 slid 1.50 per cent to 4,993.46 points and in Paris the CAC 40 lost 1.43 per cent to 4,528.59.
The DJ Euro Stoxx 50 index of leading eurozone shares declined 1.45pc to 3,369.26 points.
“We are beginning to worry about inflationary risks in the US and in Europe, and that is weighing on the markets,” one Paris dealer said.
The heavy falls come after stock markets in London, Paris and Frankfurt have recently reached multi-year highs following a string of positive corporate earnings and merger activity.
London’s FTSE 100 closed above the 5,500-point level for the first time since August 2001 on Monday. The index remains some 21 percent below its record high of 6,930.20 points reached in 1999 at the height of the dot.com bubble.
Investors meanwhile digested the European Central Bank’s move to leave its key interest rate at 2.0 per cent, less than an hour after the Bank of England left its borrowing costs at 4.50 per cent. US interest rates stand at 3.75 per cent.
Across the Atlantic, US stocks tumbled on Wednesday in a second consecutive rout on Wall Street as heightened concerns about inflation, higher interest rates and slower economic growth overshadowed a pullback in crude oil prices.
The Dow Jones Industrial Average dropped 1.19pc to a three-month low of 10,317.46 points and the tech-heavy Nasdaq composite sank 1.70pc to 2,103.02.
The Standard and Poor’s 500 index retreated 1.49 per cent to 1,196.39 points, the first time the broad gauge has ended below the psychologically key 1,200 mark since July 8.
In Europe, oil stocks were amongst the biggest fallers as the price of crude continued to fall on cooler energy demand in the US, dealers said.—AFP
