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Inflation, interest rate hikes cause panic in global markets

Inflation in global markets

London, (Business News Report) – Inflation rates and the intention of banks around the world to raise interest rates have risen panic in global markets again.

Global stock markets registered a sell-off, which undermined risk appetite, as well as weak economic data.

In Europe, stocks fell significantly, with the end of the financial week on Friday, as the European Stoxx 600 index fell 1.4 percent in a broad sell-off, and is heading towards its worst daily performance in nearly two weeks.

Inflation in global markets

Investors are awaiting the next meeting of the US Federal Reserve for details of how it will deal with rising inflation.

Besides, Eurozone consumer prices jumped at a record pace in December on the back of rising energy prices and supply chain crises.

The Stoxx 600 index is heading for the third consecutive weekly decline, affected by a decline in the technology sector by more than 2% due to fears of a faster-than-expected US interest rate hike before the US Federal Reserve meeting.

Anglo-Australian mining company Rio Tinto fell 3.1 percent after Serbia withdrew its licenses to explore for lithium due to environmental concerns. This negatively affected the company’s ambition to become the largest supplier of the mineral in Europe.

Siemens Energy plunged 11.4 percent after the company cut its forecasts after its wind turbine maker Siemens Gamesa warned of prolonged supply chain crises, renewing pressure on the German company to take over the entire unit.

Siemens Gamesa fell 12.5 percent, joining Siemens Energy, the worst performer on the Stoxx 600 index.

Corporate moves

In addition, German online fashion retailer Zalando announced that it has decided to start a share buyback program.

The company, listed on the German DAX index of preferred shares, stated that it intends to buy back about 2.2 million shares, worth up to 200 million euros.

Zalando added that the share repurchase program began on Friday and will end on April 21, as a deadline.

The company explained that the supervisory board approved the decision, which is in line with the mandate given during the annual general meeting of Zalando in 2020.

In a related context, Japanese shares fell yesterday, affected by the losses of the technology sector, after the Nasdaq index fell 1 percent.

The Nikkei index closed down 0.9 percent to 27,522.26 points, after falling more than 2 percent earlier in the session.

The broader Topix index fell 0.59 percent to 1927.18 points.

The Nikkei lost 2.1 percent during the week, the largest loss in seven weeks, while the Topix index fell 2.5 percent, in its worst performance in eight weeks.

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