Stocks under pressure as euro zone inflation hits 13-year high

Wall Street headed for a steadier start on Friday after losses in Europe and Asia as euro zone inflation jumped to a 13-year high, fuelling a debate over the timing of interest rate rises against a backdrop of patchier global growth.

US shares looked steadier after falling on Thursday, helping European shares pare earlier losses. US stock futures pointed to a slightly firmer open.

All eyes are now on US consumer spending, inflation and factory activity data later in the day for signs of economic health and clues regarding the Federal Reserve’s timeline for tapering its asset purchases and hiking key interest rates.

On the first day of October, the month for some of history’s most infamous market routs, the STOXX index of 600 European companies initially fell sharply, hitting its weakest level since mid-July, before recovering most lost ground. It was off 0.15 per cent at 1149 GMT. The MSCI’s gauge of stocks across the globe shed 0.2 per cent, its longest daily losing streak since last February.

With stellar economic growth figures now in the rear view mirror, markets were looking ugly going into October, Michael Hewson, chief markets analyst at CMC Markets, said.

“There is a sense that with October’s reputation, worries about surging energy prices, supply chain disruptions, concerns about inflation and power shortages, October could be a fairly windy affair,” Hewson said.

Consumer price inflation in the 19 countries sharing the euro accelerated to 3.4 per cent year on year in September, from 3 per cent a month earlier, the highest reading since the height of the global financial crisis in September 2008.