LONDON — European stocks fell sharply on Wednesday, giving up gains made in the previous sessions as global volatility continues.
The pan-European Stoxx 600 dropped 1.7% in early trade, with basic resources sliding 4% to lead losses as all sectors and major bourses fell into negative territory.
In terms of individual share price movement in Europe, Belgian mining company Umicore plunged more than 10% after announcing its strategy for 2030.
At the top of the index, British retailer JD Sports climbed 4.5% after announcing that annual profit more than doubled for the year,
The lower trade in Europe comes as global market sentiment shifts to a more negative setting amid fears over surging inflation and slowing economic growth.
Overnight, shares in the Asia-Pacific region mostly traded lower as economic fears continue to weigh on the market.
Oil futures declined more than 5% by early morning in Europe, with international benchmark Brent crude futures slipping 5% to $108.90 per barrel. U.S. crude futures also dropped by 5.5% to around $103.50 per barrel.
Reuters reported that U.S. President Joe Biden plans to call for a suspension of the 18.4-cents a gallon federal tax on gasoline in a bid to bring down soaring energy costs.
U.S. stock index futures also fell early Wednesday, giving up gains made by the major averages in regular trading hours as they attempted to claw back some losses following weeks of selling.
Fed Chair Jerome Powell will appear before Congress on Wednesday, kicking off two days of testimony. Investors will be listening for further clues on the trajectory of interest rate hikes after the central bank hiked rates by three-quarters of a percentage point last week — the Fed’s largest rate increase since 1994.
On the data front in Europe, U.K. inflation hit a new 40-year high of 9.1% year-on-year in May as soaring food and energy prices continue to deepen the country’s cost-of-living crisis.
