By Peter Nurse
Investing.com - European stock markets traded sharply lower Wednesday, following the late selloff on Wall Street and hit by losses to the basic resources sector.
At 4:05 AM ET (0905 GMT), the DAX in Germany traded 1.1% lower, the CAC 40 in France fell 0.9% and the U.K.’s FTSE 100 dropped 1%.
A retreat in commodity prices made miners and oil and gas stocks among the top losers in Europe, with BP (NYSE:BP) down 1.2%, Shell (LON:RDSa) off 1.8%, BHP Group (LON:BHPB) 2.2% lower and Rio Tinto (NYSE:RIO) down 1.9%.
Oil prices weakened Wednesday as investors digested the prospects of more supply entering the market following reports of progress in the talks between the United States and Iran to revive a deal limiting the Persian Gulf country’s nuclear program, which could lead to a lifting of sanctions on its crude exports.
U.S. crude futures traded 1.4% lower at $64.61 a barrel, while the Brent contract fell 1.3% to $67.86.
This weak tone followed a late selloff on Wall Street, with all the major tech stocks ending in the red as investors feared holding growth companies into the release of the minutes of the last Federal Reserve meeting.
Stocks have been pressured of late on concerns that growing inflationary pressures could force the U.S. central bank to rein in its ultra-easy monetary policies.
With this in mind, investors will study the minutes of the April Fed meeting, when they are released later Wednesday, for clues of when the central bank could consider cutting back its bond purchases, a move likely to precede increases in interest rates.
Further evidence of these global inflationary pressures was seen in the U.K., as Britain’s inflation rate doubled in April. Consumer prices rose 1.5% from a year earlier last month after a 0.7% gain in March, driven mainly by a jump in domestic energy prices and clothing.
In corporate news, Julius Baer (SIX:BAER) stock rose 2.4% after the Swiss wealth manager said it was on track to deliver on financial targets as it posted an 8% rise in assets under management for the first four months of 2021.
Premier Foods (LON:PFD) stock rose 2% after the U.K.-based food manufacturer reinstated its dividend for the first time in 13 years, citing people cooking more at home during the lockdowns.
On the flip side, Experian (OTC:EXPGF) stock fell 2.2% after the information services company saw revenues continue to decline in its U.K. and Ireland businesses, despite strong performances elsewhere across the globe.
Additionally, gold futures rose 0.1% to $1,869.05/oz, while EUR/USD traded 0.1% higher at 1.2224.