European stocks plummeted on Wednesday morning as investors expressed concerns over the stalling U.S. debt inflation talks and concerns about China’s economic situation.
The Stoxx Europe 600 declined by 1.5% during the morning session; its largest drop in the last two months. LVMH and Cie Financiere Richemont SA were the largest fallers, with real estate and auto stocks taking some of the biggest hits amid renewed inflation concerns as UK consumer prices remained persistently high.
U.S. futures also headed lower, with contracts listed on both the S&P 500 and the Nasdaq 100 declining by 0.2%. Futures on the Dow Jones Industrial Average were also down by 0.2%.
“The market is now at the point where it wants a little less conversation, a little more action,” Tony Sycamore, a market analyst at IG Australia said in reference to the ongoing U.S. debt ceiling talks. “The continued impasse is now viewed as bad news and overnight generated a traditional risk-off response of lower equities and a higher US dollar.”
In Asia, the MSCI Asia Pacific Index fell 0.7% as investors continue to express concerns over China’s faltering post-pandemic economic rebound.