Global markets suffering losses against UK inflation panic

Global stocks suffered losses Monday with warnings of “stratospheric” cost-of-living rises in the UK making waves across the major markets.

Inflation could jump above 18% in the new year for the first time since 1976 due to skyrocketing energy bills, economists at Citigroup warned.

While gas prices soared further with traders anticipating additional supply cuts from Russia amid planned pipeline works, which Germany’s top index felt the repercussions of on Monday.

It all added fuel to the fire for investors fearing an impending European recession.

The FTSE 100 was trading 16.58 points lower, or 0.22%, at 7,533.79 when markets closed on Monday.

Michael Hewson, chief market analyst at CMC Markets UK, said: “European markets have started the week very much on the back foot, as further increases in European gas prices to new record highs keeps the focus on the increasing prospect of a European recession, as we head into the autumn and winter months.

“The German Dax is bearing the brunt of the losses today, with manufacturers getting hammered, with the likes Mercedes, BMW and Porsche down heavily.

“While the FTSE 100 is also lower, though the defensive part of the index is helping to mitigate the losses, with healthcare, AstraZeneca higher, and utilities, along with a weaker pound helping to offset some of the weakness.”

It was a particularly bad day for the German Dax index which dropped to its lowest levels this month amid central bank recession warnings.

The Dax was down 2.32% when markets closed. While the French Cac index also suffered losses and was down 1.8% at the end of the day.

The troubled sentiment was also felt across the pond with the top markets in the US beginning the day trading lower. The S&P 500 was down by around 1.6% and Dow Jones had dipped 1.34% when European markets closed.

Meanwhile, the pound came under pressure on Monday amid UK inflation fears. It was down by around 0.68% against the dollar, at 1.1747, but lifted about 0.36% against the euro, at 1.1826.

The price of Brent Crude oil was down 1.551% at 95.22 dollars per barrel.

In company news, Cineworld began the week by telling shareholders that its considering putting its US business into bankruptcy.

The world’s second biggest cinema chain has suffered amid market speculation over the past week as reports revealed it is struggling under heavy debts after a disappointing summer of film.

Shares in the company have plunged recently and slid even further on Monday following the announcement. At the end of the day its share price was down 0.87p at 3.2p.

Vodafone announced plans to sell its Hungarian arm to 4iG in a £1.5 billion deal.

The telecommunications brand said the deal would fit well with the Hungarian government’s plans to create a large, locally owned telecoms giant.

Vodafone’s share price has been in long-term decline and has halved since its peak in January 2018, experts said.

And its share price dipped on Monday, ending the day 1.86p lower at 119.88p.

Elsewhere in Hungary, shares in the UK-listed Hungarian airline Wizz Air declined on Monday after it announced its finance boss would be leaving the business.

Jourik Hooghe said he would be leaving the firm at the end of the year, when Ian Milan will take over as chief financial officer.

Despite the company reiterating its growth expectations and plans to expand, investors reacted negatively to the departure and shares were down by around 10% at the end of the day. Its share price finished 229p lower, at 2,100p.

The biggest risers in the FTSE 100 were Haleon, up 6.6p at 262.7p, Centrica, up 1.4p at 84.08p, Standard Chartered, up 9p at 591.8p, AstraZeneca, up 166p at 11,416p, and Endeavour Mining, up 25p at 1,777p.

The biggest fallers of the session were Scottish Mortgage Investment Trust, down 39.4p at 822.8p, IAG, down 5.1p at 107.46p, Abrdn, down 6.9p at 151.6p, Hargreaves Lansdown, down 40.6p at 912p, and Ocado, down 36p at 841p.