European shares tumbled to their lowest level in two months on Friday, continuing a global sell-off after investor sentiment was negatively affected and concerns increased about slowing economic growth and rising inflation.
Inflation indicators in the euro area rose more than expected, reaching its highest level in 13 years, and the debate swirled over the extent to which the post-epidemic rally would continue.
Consumer prices saw 3.4% in September, compared to expectations for a 3.3% increase, according to data published by Eurostat, and an index that does not include the prices of volatile ingredients such as food and fuel rose to 1.9%, a level not seen since 2008.
The price hikes are driving the effects of the pandemic and the reopening of economies after long shutdowns, which the European Central Bank expects to peak later in the year before slowing down in 2022.
Supply chain bottlenecks have stretched beyond many expectations, and surveys show that companies are increasingly trying to charge customers to protect margins. The persistent energy crisis also adds to these pressures.
Energy prices rose 1.3% in September, which is more than 17% higher than the previous year. The prices of industrial goods without energy products were 2.3% higher compared to the August level.
The banking and auto sectors lead the shares down
The pan-European STOXX 600 index fell 1.3 percent, while the travel and entertainment, banking and auto industry sectors led the decline, dropping more than two percent.
British online retailer AO World plunged 20.4 percent after it said revenue growth in the first half of the year was hit by a shortage of UK delivery drivers and other disruptions to supply chains.
Daimler shares fell 2.1% even after it said its shareholders had voted to separate and list its trucking unit by the end of 2021.
BMW stock fell. W 0.9% despite the company raising its annual profit margin forecast.
And data released earlier revealed that manufacturing activities in Asia cooled in September, as signs of slowing Chinese growth and factory closures due to the Corona virus pandemic pressure the economies of the region.