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European Markets: Shares drop throughout Europe and Nasdaq futures drop 1% as inflation considerations and sell-off sentiment unfold

Shares fell across Europe on Tuesday as Nasdaq futures fell more than 1% and rising US inflation concerns weighed on investor sentiment.

The Europe-wide Stoxx 600
SXXP,
-1.89%
slipped 2% after closing at a new record high on Monday. In London the FTSE is 100
UKX,
-2.02%
fell 2.3% while the CAC was 40
PX1,
-1.87%
in Paris by 1.9% lower and the Frankfurt DAX
DAX,
-2.02%
decreased by 2.1%.

Dow Industrials Futures
YM00,
-0.38%
pointed to around 170 points, which was set for a weak open after the index fell 35 points on Monday and closed at 34,742.

Every component of the three major stock market indices in London, Paris and Frankfurt was in the red in early trading. Stocks in Europe and Asia followed Wall Street's decline on Monday, led by tech-heavy Nasdaq
COMP,
-2.55%
that fell 2.55%.

"Again, it was inflation concerns that seem to weigh on broad market sentiment, with commodity prices again the main culprit, ahead of the US CPI figure due out later this week," said Michael Hewson, an analyst at CMC Markets.

Also read: The biggest "inflation scare" for 40 years is coming – what stock market investors need to know

Investors will be keeping a close eye on the US inflation rate – the consumer price index [CPI] – when it releases on Wednesday. Hewson expects this key measure to be a "big increase".

"It seems that investors are now worried again about rising prices and much higher inflation," said Hewson. “The big question is whether they are correct, and while we have seen significantly higher prices in recent Institute for Supply Management [ISM] surveys and commodity prices have also been brought to their knees, the bigger concern is whether this is likely be temporary or much more persistent. In the short term, it's probably too early to know. "

There was particular weakness among companies exposed to commodity prices – particularly miners and large oil companies – as well as technology groups and travel stocks in Europe.

The London listed miners Rio Tinto
RIO,
-1.95%,
Glencore
VALLEY,
-0.98%,
Anglo-American
EEL,
-1.54%,
BHP
BHP,
-1.64%,
Fresnillo
FRES,
+ 0.33%,
Antofagasta
ANTO,
-0.53%,
and Polymetal International
POLY,
-0.71%
were all lower, alongside the BP oil groups listed in Europe
BP,
-2.11%,
Royal Dutch Shell
RDSA,
-2.41%,
total
TOT,
-1.32%,
and Eni
ENI,
-1.19%.
Shares in the world's largest steel producer Luxembourg ArcelorMittal
MT,
-3.15%,
were the biggest fallers in the Paris CAC 40.

Plus: Energizer CEO believes inflation will continue and denies what most Fed believe

Tech companies, including the Dutch semiconductor company ASML, have also been beaten
ASML,
-2.53%,
German software giant SAP
JUICE,
-2.35%,
Finnish Telecommunications Nokia
NOKIA,
-2.80%,
and British high-tech food and robotic logistics specialist Ocado
OCDO,
-3.20%.

In travel stocks airlines International Airlines Group
IAG,
-5.59%
– owned by British Airways – Air France-KLM
AF,
-2.79%,
Lufthansa
LHA,
-2.99%,
easyJet
EZJ,
-3.36%,
Ryanair
RYA,
-3.01%,
and Wizz Air
WIZZ,
-4.34%
took a nosedive, as did the hotel giant InterContinental Hotels Group
IHG,
-3.41%
and Accor
AC,
-3.02%.

But the British e-commerce player The Hut Group
GHG,
+ 12.50%
was a standout company, its stock rising more than 11% after a $ 1.6 billion deal with Japanese tech investment giant SoftBank.

Shares in the battery manufacturer Invinity Energy Systems
IES,
+ 6.50%
also rose 30% after closing a deal with Siemens Gamesa
0H4N,
-1.57%
Renewable energy to develop vanadium flow batteries on a grid scale.

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