Stocks slide on inflation concerns and wall street decline

Global stocks retreated on concerns about inflation. Wall street closed sharply lower which was felt in the stock markets around the world.

The Tokyo Stock Exchange dropped by 1.61%

The Tokyo Stock Exchange closed today with a decrease of 1.61% in its primary indicator, the Nikkei. It ended at its lowest level in three months, dragged again by the losses of Wall Street.

The Nikkei ended 461.08 points lower to 28,147.51 integers. Meanwhile, the broader Topix index, which includes the largest capitalization stocks, yielded 27.97 points or 1.47%, to 1,877.95.

The widespread losses once again weighed down the Tokyo stock market recorded the day before on Wall Street and led again by the technology sector.

Leading technological stocks experienced sales on the new york stock market. Analysts consider it a result of the expectations of an increase in inflation. This shock has been transferred to the Tokyo Stock Exchange and other markets. 

Toyota ended the day with increases

This negative factor nullified the mood generated among investors by the good business results of Toyota Motor on Wednesday. The company with one of the largest capitalization in Tokyo ​​ended the day with a gain of 2.18%. Toyota increased its net profit by 10.3% in fiscal 2020 to 2.24 trillion yen. The company reached these results thanks to lower costs and some recovery in sales after the pandemic’s impact.

The technological Softbank lost 3.44% before presenting its annual results after the trading’s close.

Another noteworthy mention is the 10% fall of the car manufacturer Nissan Motor. The day before, the company announced a net loss of 448.7 billion yen in 2020. Besides, it forecasted that it would continue in the red in 2021 for the third consecutive year.

Concern about the outlook for the technology sector spread to stocks such as conglomerate Sony, which lost 0.96%. On the other hand, chip components maker Tokyo Electron lost 3.16%.

From the first section, 1,795 stocks fell, 349 advanced, and 50 ended unchanged. The sectors with the most significant declines were shipping, oil, coal, and steel. The trading volume amounted to 3.4 trillion yen.

European stocks opened lower on Thursday

European equities are forecast to decrease on Thursday after markets worldwide took the latest US inflation data negatively.

European markets are expected to follow the negative trend seen in Asia Pacific overnight and the US on Wednesday after the latest US inflation data for April.

The pan-European Stoxx 600 fell 1.1% in early trade, with primary stocks dropping 2.7% to lead losses as all sectors slid into the red.

Analysts believe that the European start will be weak, but the session’s tone will change for the better with the opening of NY. After three days of falls in NY, the normal thing is that the bargain hunters appear.

Burberry triples its annual profit and restores the dividend

Burberry obtained an attributed net profit of 376 million pounds sterling in its last fiscal year, which ended on March 27, compared to 122 million pounds from the previous year.

Likewise, the British textile firm announced that it had restored the dividend to the level of the fiscal year 2019, at 42.5 pence per share.

Marco Gobbetti, CEO of Burberry, stated that the company delivered strong results despite the coronavirus pandemic and achieved the targets for the period. 

In the whole of its last fiscal year, Burberry’s sales decreased by 11%, to 2,344 million pounds sterling. It resulted from the impact of the closure of stores and the drop in tourism. However, the firm highlighted the strong recovery in its second fiscal semester.

Between January and March, Burberry’s fourth fiscal quarter, the firm’s sales increased 32% compared to the same period of 2020. It was only 5% below the figure for the fourth quarter of 2019, the last full quarter before the impact of the pandemic.

Thus, taking fiscal 2020 as a base, the company is confident that its revenues will grow in the medium term.

Wall Street accelerates the fall, and the Dow Jones loses 1.99%

Wall Street dropped on Wednesday caused by fear of the rebound in inflation in the US. Its leading indicator, the Dow Jones of Industrialists, fell by 1.99% in the middle of intense sales in the last minutes.

At the close of the New York Stock Exchange session, the Dow Jones yielded 681.50 units to 33,587.66. The selective S&P 500 fell by 2.14% or 89.06 points, to 4,063.04.

The Nasdaq Composite Index, grouping together several high-valuation tech companies, took the biggest hit. It experienced a sharp loss of 2.67% or 357.74 points to 13,031.68.

Almost all sectors ended in the red, with the most significant loss for non-essential goods (-3.28%), technology (-2.86%), and basic materials (-2.56%) companies. Energy companies climbed by 0.06%.

The New York stock market suffered its third consecutive loss, and the worst since January for the Dow Jones, in reaction to consumer price data in April, which showed an increase in inflation faster and stronger than expected.

The consumer price index in the United States rose by 0.8% in April and has placed year-on-year inflation at 4.2%. As stated by the Bureau of Labor Statistics, it’s the highest increase since 2008.

Investors worry that the Fed will withdraw the stimulus

Fed Vice President Richard Clarida expressed his surprise at the data but reiterated the message he maintained in recent weeks. There will be notable price increases, but they will be transitory, and no change in interest rates is expected.

However, investors fear that the central bank will initiate the withdrawal of the extraordinary monetary stimuli earlier than expected.

The data generated strong movements in the debt market, raising the US 10-year Treasury bond yield to 1,695% at the close of the session when volatility soared.

The Vix index, known as the “fear indicator,” measuring volatility in the market, increased by 27% in the last part of the day. It happened when there were massive sales of shares.

Among the 30 listed companies of the Dow Jones, the falls of Home Depot, Honeywell, Boeing, and Microsoft stood out.

Only Merck, known as MSD outside the US and Canada, closed in green with a 0.64% advance, and Chevron ended with gains of 0.63%.