European stocks slumped on Thursday as a sharp selloff in US shares fuelled concerns of an economic slowdown and further dented demand for risk assets.
Europe’s equity benchmark attempted to recover last week after a four-week slump as investors were lured by cheaper valuations, but the rebound proved short-lived after earnings reports from major US retailers raised worries about the hit to corporate margins from stubbornly high inflation.Tech and growth shares have been particularly vulnerable in the latest selloff amid risks to their future earnings from rising rates.
Strategists broadly expect stocks globally to plumb new lows despite the $11 trillion rout in the MSCI All Country World Index since late-March, although they have said fears of an imminent recession are overblown. Goldman Sachs Group’s David Kostin became the latest to say stock investors were pricing greater odds of a recession compared with the recent strength in macroeconomic indicators.