Global Markets – Stock markets drop based on US inflation data and European Central Bank statement

Written by Elizabeth Dilts Marshall

NEW YORK (Reuters) – Global markets fell on Thursday after inflation hit 8% in the United States, making the case for a rate hike this month, in a trend bolstered by the European Central Bank’s decision to speed up. Until its exit from the extensive bond-buying program.

* Government data released on Thursday indicated that the annual rate of consumer inflation in the United States came in at 7.9% in February, higher than analysts’ expectations. Wall Street retreated upon the release of the report, giving up some of the previous day’s gains.

Eurozone shares fell on Thursday as the European Central Bank surprised markets by announcing that it would end its asset purchases in the third quarter, adding to geopolitical pressure as there was no progress in talks between Russia and Ukraine over a sustainable ceasefire.

– The euro retreated from its early morning gains after the European Central Bank statement and the dollar strengthened, further after the strong inflation report in the United States.

* “What is Central Banks Response to? Strict Policy,” Jeff Klingelhofer, Co-CEO of Investments at Thornburg Investment Management. “The unraveling of a decade of ultra-loose central bank policy (undoubtedly) will lead to more volatility in the asset markets,” he said.

* The MSCI world stock index was down 2.6% by 1500 GMT.

* In the US, the Dow Jones Industrial Average is down 1.16%, while the S&P 500 is down 1.5%. The Nasdaq Composite lost 2.24% in value. The pan-European Stoxx 600 index fell 1.8 percent.

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* Global stock trading opened positively in Asia on Thursday, with diplomatic talks likely to begin between Russia and Ukraine for the first time since the start of the Moscow invasion on Feb. 24.

* But the two countries have not made any clear progress towards a ceasefire or the opening of a humanitarian corridor from the port of Mariupol in southern Ukraine.

– The dollar index added 0.44% to 98.910, while the euro fell 0.66% to $1,100, a day after recording its best day in nearly six years.

* Oil recovered despite the volatility and after falling more than 12% in the previous round, after the UAE tried to dispel comments on Wednesday when it said that OPEC and its allies could increase production to help fill the gap in Russian exports.

* US West Texas Intermediate crude futures rose 0.68% to $109.45 a barrel, while Brent crude futures traded at $112.68, up 1.29% on the day.

A draft document showed on Thursday that European Union leaders will gradually halt purchases of Russian oil, gas and coal, as the bloc seeks to reduce its dependence on Russian energy sources after the United States vetoed it.

(Reporting by Elizabeth Dilts Marshall and Tom Wilson. Editing in Spanish by Marion Giraldo)

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