European markets lose over 1%, US extends losses

By Ovunc Kutlu

ANKARA (AA) - European stocks closed lower Wednesday, losing more than 1% each, while US indices extended losses as the global economy struggles with rising commodity prices and high inflation.

The STOXX Europe 600, which includes around 90% of the market capitalization of the European market in 17 countries, was down 4.70 points, or 1.03%, to close at 451.33.

London's FTSE 100 fell 81 points, or 1.15%, to 6,995, while Germany's DAX 30 index lost 221 points, or 1.46%, to 14,973.

The French CAC 40 decreased 83 points, or 1.26%, to 6,493. Italy's FTSE MIB dove 350, or 1.35%, to 25,605 points.

Spain's IBEX 35 was the worst performer of the day, plummeting 1.71%, or 152 points, to 8,775.

The declines came despite retail sales rising 0.3% in the eurozone and the EU in August, from the previous month, according to Eurostat.

- US extends losses

Major indices in the US extended losses after a weak opening.

The Dow Jones was down 243 points, or 0.7%, to 34,070 at 12.02 p.m. in New York, while the S&P 500 lost 25 points, or 0.57%, to 4,320.

The Nasdaq shaved 36 points, or 0.25%, to 14,398.

The VIX volatility index jumped 7% to 22.78 as investors worry about high inflation and rising commodity prices increasing pressure on the economic recovery from the coronavirus pandemic.

The International Monetary Fund (IMF) said higher inflation will likely continue in coming months but it would return to pre-pandemic levels by mid-2022.

The IMF stressed that the coronavirus pandemic has caused large price movements in some sectors, especially in food, transportation, clothing and communications. It pointed to price swings in fuel, food and housing, the three largest components of consumption baskets on average.

Oil prices reversed course from three-year highs with a 1.7% loss. Brent crude was trading at $81.13 per barrel and US benchmark West Texas Intermediate was at $77.56.

After climbing above the critical threshold of $50,000 late Monday, Bitcoin rose to $55,000 on Wednesday -- its highest level in almost five months, according to official figures

While the dollar index was up 0.34% to 94.30, the yield on 10-year US Treasury notes was down 1.25% to 1.512%.

Precious metals were mixed with gold adding 0.1% to $1,762 per ounce but silver trimming 0.5% to $22.52.