BRUSSELS, May 18 — European shares slipped today led by technology stocks, as worries about inflation and monetary policy tightening dampened optimism around China’s economic recovery.

The pan-European STOXX 600 index fell 0.1 per cent by 0820 GMT after rising 3.6 per cent since Friday.

Technology shares slipped 0.7 per cent, while a fall in copper prices weighed on basic material stocks.

Data today showed British consumer price inflation hit 9 per cent in April, its highest level on record, inching closer to Bank of England’s prediction of above 10 per cent later this year. Read full story

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“Worries about recession reared up again after UK inflation jumped to the highest level in 40 years,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Landsdown.

Investors expect the central bank will add to the four interest rate increases it has done since December to tame inflation.

The European Central Bank is set to hike rates in July, and the US Federal Reserve has also embraced policy tightening, raising doubts about its impact on the global economic growth.

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“Lots of companies have succeeded in passing high cost to customers, keeping margins resilient. But worries are still lingering about how long consumers will continue to pay the price,” said Streeter.

Shares rallied yesterday amid falling Covid-19 cases in China fuelling hopes about more economic activity and demand from the world’s second-largest economy.

The STOXX 600 is in on course to end lower in May, having marked gains only in March this year. But with a 10 per cent decline year-to-date, the index has still fared better than the S&P 500 and MSCI’s All Country index, which are down more than 14 per cent over the same period.

In earnings, Euronext surged 4.7 per cent on record quarterly revenue. Dutch bank ABN Amro topped profit estimates but shares fell 9.3 per cent as it warned about impacts from the war in Ukraine.

Siemens Gamesa jumped 11.2 per cent, after sources said Siemens Energy is preparing to buy the remaining stake in the wind turbine maker. The stake is currently worth €3.14 billion (RM14 billion).

Germany’s Commerzbank AG rose 1.4 per cent after a report that it had scheduled merger talks with Italy’s UniCredit SpA, before the potential deal was shelved due to the Ukraine war. UniCredit shares were unchanged.

Holiday group TUI fell 11.4 per cent after it announced a share sale to pay back elements of a German state bailout it received during the pandemic. — Reuters