European stocks look set to extend losses from the previous session on Friday after the Dow Jones Industrial Average plunged 4.2 percent to enter correction territory overnight amid rising government debt yields on worries that the Federal Reserve may fight inflation by aggressively raising interest rates.
The S&P 500 shed 3.8 percent and the Nasdaq Composite slumped 3.9 percent despite strong earnings and economic data.
Asian stocks are coming under heavy selling pressure, with benchmark indexes in China, Hong Kong, Japan and South Korea losing 2-5 percent, as the downtrend in oil prices added to worries over higher U.S. bond yields.
Federal Reserve Bank of Dallas President Robert Kaplan said in an interview with Bloomberg Television on Thursday that more volatility in equity markets will have little impact on the broader economy, suggesting an important shift in the outlook for interest rates.
Investors ignored data from China showing that both producer and consumer inflation eased as expected in January.
Oil extended losses for the sixth straight session in response to oversupply concerns while safe-haven assets such as gold and the Japanese yen held firm on safe-haven buying.
European markets tumbled on Thursday as oil prices plunged and the Bank of England hinted at somewhat earlier and deeper-than-expected rate hikes after standing pat on rates, as widely expected.
The pan-European Stoxx Europe 600 index declined 1.6 percent. The German DAX plummeted 2.6 percent, France's CAC 40 index lost 2 percent and the U.K.'s FTSE 100 shed 1.5 percent.
by RTTNews Staff Writer
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