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European Equities Slip on Ukraine Fears

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European stock markets slid Wednesday, with investors spooked over a deadly missile blast in Poland near the border with Ukraine. online news

London dipped 0.1 percent, also on news that UK inflation spiked to a 41-year peak in October on rocketing energy bills and food prices.

Frankfurt fell 0.8 percent and Paris stocks sank 0.4 percent after Asia closed mostly in the red.

The dollar rose against the pound, but fell against the euro and yen, while oil retreated.

“Reports of missile strikes in Poland on Tuesday naturally caused a shudder in the markets,” said Craig Erlam, senior market analyst at OANDA trading platform.

“The prospect of a sudden and unexpected escalation in the war in Ukraine, particularly involving a NATO state, doesn’t bear thinking about but we were almost forced to and under the circumstance, the reaction was fairly modest,” he added.

Two people were killed on Tuesday when at least one missile hit a village in NATO member Poland near the Ukrainian border, during a mass Russian bombardment aimed at civilian infrastructure inside Western-backed Ukraine.

Market jitters were calmed somewhat by officials, including US President Joe Biden and NATO Secretary General Jens Stoltenberg, discounting the likelihood of a deliberate Russian attack and pointed to the possibility it was a Ukrainian air defence missile.

“The welcome assumption is that the incident should not induce any NATO-led military response,” said market analyst Patrick O’Hare at

Back in Britain, official data showed that UK inflation surged in October to 11.1 percent, the highest level since 1981 in a worsening cost-of-living crisis.

The grim news came on the eve of a gloomy UK government budget that is likely to ramp up taxes and slash spending.

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“The UK is reeling from yet another super-hot inflation reading as soaring food and energy prices take their toll on household budgets,” said Hargreaves Lansdown analyst Susannah Streeter.

This year, the Ukraine war has massively contributed to worldwide inflation soaring to the highest level in decades. Prices are up also on pandemic-fuelled supply constraints.

Rocketing inflation has forced central banks to raise interest rates by big amounts, risking a global recession.

There has been some relief from data showing US consumer prices rose much less than expected in October, suggesting months of monetary tightening by the Federal Reserve was kicking in.

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This was followed by data Tuesday showing a below-forecast reading on wholesale prices.

On Wednesday, data showed US retail sales jumped more than expected in October, pointing to resilience in spending in the face of price pressures.

The uptick came after sales flatlined the month before, as American consumers grappled with surging costs that have made everything from groceries to clothing more expensive.

“The key takeaway from the report is that retail sales, which are not adjusted for inflation, were still fairly solid in October, underscoring that consumer spending continues to hold up fairly well, supported by continued low levels of unemployment,” said’s O’Hare.

But retailer Target warned on Wednesday that consumers are cutting back on discretionary items.

“In the latter weeks of the quarter, sales and profit trends softened meaningfully, with guestsā€™ shopping behavior increasingly impacted by inflation, rising interest rates and economic uncertainty,” Target CEO Brian Cornell said.

Target shares tumbled 14 percent as the company missed profit expectations in its third quarter and sales only nudged higher.

Wall Street opened lower, with the Dow dipping 0.1 percent, while the S&P 500 shed 0.4 percent and the Nasdaq Composite fell 0.9 percent.

Key figures around 1330 GMT

London – FTSE 100: DOWN 0.1 percent at 7,360.73 points

Frankfurt – DAX: DOWN 0.8 percent at 14,265.60

Paris – CAC 40: DOWN 0.4 percent at 6,612.71

EURO STOXX 50: DOWN 0.6 percent at 3,891.91

New York – Dow: DOWN 0.1 percent at 33,546.58

Tokyo – Nikkei 225: UP 0.1 percent at 28,028.30 (close)

Hong Kong – Hang Seng Index: DOWN 0.5 percent at 18,256.48 (close)

Shanghai – Composite: DOWN 0.5 percent at 3,119.98 (close)

Euro/dollar: UP at $1.0401 from $1.0349 on Tuesday

Pound/dollar: UP at $1.1878 from $1.1865

Dollar/yen: DOWN at 139.26 yen from 139.28 yen

Euro/pound: UP at 87.56 pence from 87.22 pence

Brent North Sea crude: DOWN 1.4 percent at $92.55 per barrel

West Texas Intermediate: DOWN 1.9 percent at $85.30 per barrel


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