Global stocks fall after UK's Truss defends tax cuts
BEIJING (AP) — European stocks tumbled Thursday and Asian markets were mixed after British Prime Minister Liz Truss defended a tax-cut plan that rattled investors.
London's market benchmark plunged 2.3% and Frankfurt lost 1.9% in early trading. Shanghai and Hong Kong also declined. Tokyo and Seoul advanced.
The future for Wall Street's benchmark S&P 500 index was down 1.3%. Oil prices lost more than $1 per barrel after jumping more than $3 the previous day.
Stocks and the British pound fell Tuesday on fears Truss's tax cuts would push up already high inflation. Markets rebounded Wednesday after the Bank of England said it would buy government bonds to stop a price slide.
Markets fell back Thursday after Truss shrugged off criticism and a public appeal by the International Monetary Fund to scrap the tax cut plans. Truss said she is willing to make “difficult decisions” to get the economy growing.
“The U.K. government needs to offer a credible fiscal plan to complement the BoE’s financial stabilization in a way that supports long-term growth without boosting inflation expectations," David Chao of Invesco said in a report.
In early trading, London's FTSE 100 fell to 6,846.34 and Frankfurt's DAX declined to 11,957.72. The CAC 40 in Paris sank 1.8% to 5,660.81.
On Wall Street, the future for the Dow Jones Industrial Average was off 1%.
On Wednesday, the S&P 500 surged 2% and the Dow added 1.9%. The Nasdaq composite climbed 2.1%.
In Asia, the Shanghai Composite Index closed down 0.1% to 3,041.20 after spending most of the day in positive territory.
The Nikkei 225 in Tokyo gained 1% to 26,422.05 while the Hang Seng in Hong Kong lost 0.5% to 17,165.87.
The Kospi in Seoul added less than 0.1% to 2,170.93 and Sydney's S&P ASX 200 was 1.4% higher at 6,555.00.
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