Stocks were trading lower off the back of fears about inflation. Photo: Reuters

European markets faced a dramatic selloff after Asian and US markets were rocked overnight.

Investors are digesting inflationary worries following China’s consumer price index (CPI) falling short of expectations alongside volatile commodity prices. 

The FTSE 100 (^FTSE) moved 2.6% lower by the closing bell in London despite prime minister Boris Johnson’s announcement that the UK would move to further ease coronavirus restrictions. This represented a one-week low. 

The German DAX (^GDAXI) was down 2% and the French CAC (^FCHI) also fell around 2.1%. 

Michael Hewson, chief market analyst at CMC markets noted that in the short term, it is probably too early to know whether investor worries about inflation are correct. “But we do expect to see a big rise in US headline CPI later this week, however that also has to be put into the context of where prices where…

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