European stocks fell on Wednesday, extending their monthly losses, as data showed eurozone inflation touched another record high in August, while energy fears grew as Russia began cutting gas deliveries to Germany via a major supply route.
The STOXX 600 plummeted 1.1% to fresh six-week lows, extending its losing run to the fourth day in a row. Energy stocks down 2.6%, with oil prices continuing to fall due to recession worries.
The benchmark STOXX 600 index fell 5.1% in a month due to concerns about aggressive central bank policies and the region’s growing dangers of recession and energy rationing.
Eurozone inflation jumped to 9.1% this month, up from 8.9% the previous month, above predictions. The eurozone stock index dropped 1.0% to approach six-week lows.
According to a Reuters story on Friday, some ECB members want to discuss raising interest rates by 75 basis points next month, even if recession concerns lurk and the inflation forecast worsens.
Market fears have been prominent since Friday, after Federal Reserve Chair Jerome Powell’s aggressive statements. New York Fed President John Williams called for a “slightly restrictive policy to reduce demand” on Tuesday.
Asia-Pacific stocks finished mainly down overnight, following Wall Street’s bearish lead and as investors absorbed China’s industrial activity statistics.
Meanwhile, at the start of Wednesday’s session, US markets were neutral.
US markets opened neutral on Wednesday, as investors evaluated the likelihood of future interest rate hikes from central banks, as well as a possible recession.
The Dow Jones Industrial Average fell 60 points, or 0.2%, while the Nasdaq Composite gained modestly. The S&P 500 remained basically unchanged, striving to reclaim the 4,000 mark after dipping below it for the first time since July on Tuesday.
The main averages are all on track to finish the month approximately 3% down.
