The FTSE 100 and European stocks managed to close in positive territory on Thursday, recouping early losses as inflation fears gripped markets.
On Wall Street, stocks were mixed as a recent market rally appeared to fade. The Dow Jones (^DJI) was muted as Europe stopped trading. The S&P 500 (^GSPC) climbed 0.24% to 4,284 and the tech-heavy Nasdaq (^IXIC) advanced 0.38% to 12,987.
London-listed stocks came off their lows for the day following the Eurozone's latest inflation figures.
The euro area annual inflation rate was 8.9% in July 2022, up from 8.6% in June.
Shares in casino operator Rank (RNK.L) slumped 2.61%, as analysts highlighted that recent increases in energy prices would prompt cuts to earnings forecasts.
Victoria Scholar, head of investment at Interactive Investor, said: “Negative momentum from a down day on US and Asian markets has carried forward to the European session with markets opening in the red. The FTSE 100 is underperforming, trading below resistance at 7,500 while the DAX and the FTSE MIB are eking out modest gains.”
“US markets closed lower after the Fed’s meeting minutes for July showed that policymakers saw little evidence that inflationary pressures are softening stateside.”
“The FOMC appears to be committed to its rate hiking path with the potential for a 50 or 75 basis point rate hike in September followed by a possible slowdown in the pace of rate increases in the following months.”
Meanwhile, oil prices are up, with Brent crude (BZ=F) hovering around $96 a barrel.
Stock markets are under pressure amid signs that central banks will continue their aggressive stance on interest rate hikes.
Minutes of the US Federal Reserve’s July meeting appeared to dash Wall Street hopes of a pivot in the pace of monetary tightening, although inflation data published since then has been more encouraging.
In Asia, Tokyo’s Nikkei 225 (^N225) lost 0.96% to finish at 28,942 while the Hang Seng (^HSI) in Hong Kong fell 1.06% to 19,710. The Shanghai Composite (000001.SS) also finished in the red, slipping 0.46% to close at 3,277 points.