European Shares Extend Losses On US Debt Ceiling Worries

European stocks tumbled on Wednesday as U.S. debt ceiling talks dragged on and investors waited for the minutes from the Federal Reserve’s meeting earlier in May for additional clues on the Fed’s rate hike path.

The U.S. Treasury Department has asked federal agencies whether they can make upcoming payments at a later date, the Washington Post reported, citing two people familiar with the matter.

U.S. Treasury Secretary Janet Yellen previously warned lawmakers that a default in early June is “highly likely.”

On a light day on the economic front, official data showed U.K. consumer price inflation slowed in April, but the core rate accelerated unexpectedly.

The consumer price index registered an annual increase of 8.7 percent in April after a 10.1 percent gain in March. Inflation was forecast to ease to 8.3 percent.

Input price inflation hit its lowest level since February 2021 while factory gate inflation reached the weakest since July 2021.

The pan European STOXX 600 fell 1.4 percent to 459.39 after declining 0.6 percent on Tuesday.

The German DAX lost 1.4 percent, while France’s CAC 40 and the U.K.’s FTSE 100 both plunged around 1.6 percent.

Swedish gaming group Embracer plummeted 44 percent after the group trimmed its full-year adjusted EBIT forecast and said a $2bn strategic partnership deal had fallen through.

British energy company SSE climbed 1.2 percent after reporting nearly doubling of its annual profits.

Engineering consultancy Ricardo rose over 1 percent after backing its full-year guidance.

Tullow Oil rallied 2.6 percent after the oil exploration firm retained its full-year production outlook.

Home improvement retailer Kingfisher fell 2.7 percent after first-quarter comparable sales fell 3.3 percent on a constant currency basis.

Insurer Aviva lost 4 percent after reporting a slowdown of cash inflows at its wealth division for the first quarter.

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