By Barbara Kollmeyer
European stocks tumbled on Wednesday, tracking losses in Asia and on Wall Street, as investors remain caught up in worries about inflationary pressures, with the minutes of the Federal Reserve’s latest meeting swinging into focus for later.
After a weak day in Asia, the Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP -0.45% fell 2.1% to 433.71, with similar losses seen for the German DAX /zigman2/quotes/210597999/delayed DX:DAX -0.61% and French CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 -0.32% . The FTSE 100 indexes /zigman2/quotes/210598409/delayed UK:UKX -0.65% was down 1%.
U.S. stocks were deep in the red in early trading, giving up May gains as investors awaited the minutes of the Federal Open Market Committee meeting of April 27-28 to be released later on Wednesday. Markets will be on the lookout for any indications that the central bank is considering a shift in its accommodative monetary stance.
“The inflation fears, the virus fears, the fears of seeing a slower-than-thought or a delayed recovery due to the new restriction measures on the Indian variant of the coronavirus are all disquieting for the average investor,” said Ipek Ozkardeskaya, senior analyst at Swissquote, in a note to clients.
Adding to worries over global inflation, U.K. data showed consumer prices rose 1.5% on the year in April, twice the rate of inflation reported in March, according to the Office for National Statistics .
Oil prices were also under pressure, with crude /zigman2/quotes/209723049/delayed CL00 -0.19% and Brent futures dropping over 2% each. Those losses came after data from the American Petroleum Institute reportedly showed an unexpected rise in U.S. crude supplies — 620,000 barrels for the week ended May 14. Report of potential progress on Iran nuclear talks saw oil prices close lower on Wednesday .
Crude oil weakness dragged down shares of heavily weighted energy companies, with Royal Dutch Shell /zigman2/quotes/206428183/delayed UK:RDSA -1.06% /zigman2/quotes/205095589/composite RDS.A -0.81% , BP /zigman2/quotes/207305210/composite BP -1.83% /zigman2/quotes/202286639/delayed UK:BP -2.18% and Total each down 2% or more.
But virtually every sector was in the red. Technology names were deep in the red, with heavily weighted semiconductor equipment provider ASML Holding /zigman2/quotes/210293876/composite ASML +0.13% /zigman2/quotes/206208657/delayed NL:ASML -0.58% dropping nearly 5%. Shares of German business software group SAP /zigman2/quotes/207905606/composite SAP -0.43% /zigman2/quotes/202053813/delayed XE:SAP -0.35% fell 2%.
A lone outperformer, shares of John Laing /zigman2/quotes/209839936/delayed UK:JLG +0.30% surged 11%, after New York private-equity firm KKR & Co. /zigman2/quotes/206126495/composite KKR -0.08% said it has agreed to buy the U.K.-listed infrastructure investor and manager for £2 billion ($2.84 billion) in cash.