Europe slumps as Wall Street sell-off grips global markets


The pan-European Euro Stoxx 600 Index was down by 1.3 percent in early deals. The benchmark hit its lowest level in more than 20 months. There was a sea of red across all sectors, with financial services and technology stocks leading the losses.

Around the world, equity markets have tumbled on the back of rising fears around global economic growth and rising interest rates. The International Monetary Fund warned earlier this week that simmering trade tensions, such as those between the U.S. and China, could lead to a “sudden deterioration in risk sentiment, triggering a broad-based correction in global capital markets and a sharp tightening of global financial conditions.” Meanwhile, U.S. Treasury yields have this week climbed to multi-year highs, however they pared gains late into Wednesday’s trading session.

As a result, most of the European stocks were down. At the bottom of the index stood Hays. The recruitment agency dropped more than 10 percent after the company warned that currency headwinds could hit its fiscal 2019 year.

WH Smith also fell 7 percent after announcing new plans to restructure its high streets shops. And British fund manager Jupiter was down by more than 5 percent after reporting that its assets under management were hit by net outflows of 800 million pounds ($1.06 billion), Reuters reported.

On the other hand, shares in Dialog Semiconductor rose nearly 29 percent after announcing a new $600 million deal with Apple.

Market players are also digesting new comments from President Donald Trump. On Wednesday, he criticized the U.S. Federal Reserve once again, calling the central bank “crazy” for its insistence on hiking rates. Trump also commented on the plunge in markets, calling it a “correction that we’ve been waiting for a long time.”

Back in Europe, Brexit is largely in focus after the European Union’s chief Brexit negotiator, Michel Barnier, struck an optimistic tone on a deal for the U.K.’s eventual withdrawal from the bloc, saying an agreement was achievable as soon as next week. Barnier stressed, however, that the U.K. remaining in the customs union would be the best possible solution to avoiding a hard border between the Irish mainland and Northern Ireland. Both the euro and the British pound bounced against the dollar on Barnier’s comments Wednesday, and were up 0.4 and 0.27 percent respectively on Thursday morning.

In corporate news, German carmaker BMW is investing $4.2 billion in its joint venture with Chinese firm Brilliance Auto, giving it a majority stake.

As for data, French inflation and British unemployment figures are due to be released on Thursday morning.

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