Growth fears hit global stocks, investors eye Fed and Draghi

Growth fears hit global stocks, investors eye Fed and Draghi

LONDON - World stocks fell on Wednesday as a decline in Chinese inflation and weaker European industrial data combined to suggest global growth may be slowing, eclipsing a positive start to the US earnings season.

The mining company Alcoa Inc reported results after Wall Street closed that beat analysts' expectations, but that was not enough to help European equities recover after they fell the most in three months on Tuesday.

Major currencies and bond markets were steady before a speech by European Central Bank President Mario Draghi and the release of the US Federal Reserve's minutes of its latest meeting.

"Growth continues to be a concern in the developed world," said Mark Burgess, chief investment officer at Threadneedle Investments in London. "I don't think the developed world can handle short, aggressive interest rate rises. The last thing anyone wants to do is stifle growth."

Overnight, China's consumer price index rose 2.3 per cent in June from a year earlier, shy of the consensus forecast of 2.4 per cent, and a sign economic activity may be cooling.

At midday in London, the FTSEuroFirst 300 index of leading European shares was down 0.3 per cent at 1,359 points.Germany's DAX was down 0.1 per cent at at 9,766 points and France's CAC 40 was down 0.2 per cent at 4,333 points.

Britain's FTSE 100 was down 0.5 per cent at 6,703 points, hit hard by the insurance sector. Admiral Group fell 6 per cent after issuing a trading statement update, and Aviva was down 3.7 per cent

Portuguese stocks lagged their European peers, falling 2.2 per cent on concerns about the financial health of one of the country's largest financial groups, Espirito Santo Financial Group. ESFG is the main shareholder of Portugal's largest listed bank, Banco Espirito Santo.

The Group's shares were down 11 per cent.

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