Europe: Stocks drop at open, before US inflation data

EUROPEAN stock markets retreated at the open on Friday (Jun 10) following losses in Tokyo, with all eyes on US inflation data and its impact on the outlook for interest rate rises.

London's benchmark FTSE 100 index dropped 0.5 per cent to 7,442.31 points.

In the eurozone, Frankfurt's DAX index shed 0.7 per cent to 14,103.61 points and the Paris CAC 40 lost 0.7 per cent to 6,315.39.

"There is little respite at present from inflationary concerns, giving investors little room for manoeuvre in navigating the darkening economic clouds," noted Richard Hunter, head of markets at Interactive Investor.

The European Central Bank on Thursday said it would raise interest rates next month to combat decades-high inflation, finally catching up with other major central banks that are tightening borrowing costs to try and cool the pace of consumer price rises.

Economists warn that surging inflation, driven by soaring energy prices, could push top economies into recession. AFP