Major European Markets Close Notably Lower As Inflation, Growth Worries Weigh

European stocks closed lower on Wednesday, weighed down by concerns about soaring inflation and the likely impact on growth the aggressive policy tightening by central banks might cause in the near to medium term.

After moving along the flat line till around noon, stocks began to slide and eventually ended the day's session on a weak note.

The pan European Stoxx 600 ended 1.14% down. The U.K.'s FTSE 100 drifted down 1.07%, Germany's DAX ended lower by 1.26% and France's CAC 40 shed 1.2%, while Switzerland's SMI lost 1.29%.

Among other markets in Europe, Belgium, Denmark, Finland, Iceland, Ireland, Netherlands and Sweden drifted lower.

Czech Republic, Norway and Russia closed higher, while Austria, Greece, Poland, Portugal, Spain and Turkey ended flat.

In the UK market, Ocado Group plunged more than 9%. Experian, JD Sports Fashion, B&M European Value Retail, Croda International, Halma, Spirax-Sarco Engineering, Endeavour Mining, Tesco, Associated British Foods and Coca-Cola lost 4 to 6%.

Fresnillo, Smith (DS), Howden Joinery Group, Smurfit Kappa Group, WPP, Hikma Pharmaceuticals, Antofagasta, Aveva Group, Prudential and Anglo American Plc also ended sharply lower.

Rolls-Royce Holdings rallied 4.4%. British Land Co. gained about 3.1% after the company returned to profit in the latest financial year after posting losses in the previous three years.

SSE, Aviva, Land Securities and Entain gained 1.4 to 2.1%.

In France, Carrefour, L'Oreal and WorldLine shed 3.7 to 4.2%. Essilor, Sodexo, Cap Gemini, Pernod Ricard, Dassault Systemes, STMicroElectronics, Michelin, Hermes International, Accor and LVMH lost 2 to 3%.

Air France-KLM shares climbed about 4.5% after the company announced a long term partnership with maritime transport group CMA CGM.

Unibail Rodamco, Sanofi, Faurecia and Engie also closed with strong gains.

In the German market, HelloFresh plummeted more than 10%. Puma, Adidas, Infineon Technologies, Siemens, SAP and Qiagen lost 2 to 5%. BASF, Deutsche Post, Deutsche Wohnen, Fresenius, Munich RE and Covestro also ended notably lower.

RWE surged up more than 3%. Sartorius and E.ON also rallied sharply.

On the economic front, UK inflation jumped in April to surpass previous records, largely on food and fuel prices, signaling the high cost of living that is set to squeeze household incomes, and validating expectations for further tightening from the Bank of England this year.

Inflation accelerated sharply to 9% in April from 7% in March, the Office for National Statistics said Wednesday. Economists had forecast inflation to climb to 9.1%.

Inflation hit the highest since the historical series began in January 1989 and would last have been higher "sometime around 1982", the ONS said.

On a monthly basis, consumer prices gained 2.5%, faster than the 1.1% increase in March, ONS data showed. Prices were forecast to rise 2.6%.

Eurozone inflation remained unchanged in April, according to the final estimate from Eurostat. The harmonized index of consumer prices gained by 7.4% on a yearly basis, the same as in March, but less than the initial estimate of 7.5% increase. Despite the downward revision, inflation was the highest on record.

On a monthly basis, the HICP was up 0.6%, in line with the estimate published on April 29.

European new car registrations declined for the tenth successive month in April, as supply chain issues continued to hurt production, the European Automobile Manufacturers' Association, or ACEA, said Wednesday.

Registrations of new passenger cars dropped 20.6% year-over-year in April, after falling 20.5% in the previous month.

Market Analysis