Volkswacht Bodensee - US, European stocks fall on worries over inflation, central bank moves

US equities, which forged higher on Tuesday despite a downcast forecast from the World Bank, were back in the red as oil prices jumped and the White House warned of another gloomy consumer price report later this week.

White House Press Secretary Karine Jean-Pierre told reporters the Biden administration expects Friday's consumer price index to be "elevated," boosting expectations for more Federal Reserve monetary tightening.

"The Combination of higher crude prices and yields ticking up again has people concerned," said Art Hogan, strategist at National Securities.

Major US indices fell about one percent, while bourses in Paris and Frankfurt also retreated, with a market note from Charles Schwab describing investors as "appearing a bit skittish" ahead of Thursday's ECB decision.

The ECB is on Thursday expected to signal an end to its bond-buying, paving the way for an interest rate increase further down the line.

"The reality for the economy and probably the stock markets is that aggressive central bank rate hikes are likely to take a sharp bite out of household consumption," said SPI Asset Management's Stephen Innes.

The Paris-based Organization for Economic Co-operation and Development predicted that the world economy would grow by three percent this year -- much slower than its previous estimate of 4.5 percent in December.

Earlier in Asia, stock prices had rallied as China eased Covid lockdown restrictions and is forecast to lift its crackdown on the tech sector.

China's approval of dozens of new video game releases sent shares of some of its biggest tech firms soaring Wednesday.

Japan's Nikkei also piled on about one percent as the falling yen gave support to exporters.

The dollar climbed to a two-decade high against the Japanese currency, which has been weighed down by the Bank of Japan's hands-off approach to inflation compared with other central banks.

- Key figures at around 2030 GMT -

New York - Dow: DOWN 0.8 percent to 32,910.90 (close)

New York - S&P 500: DOWN 1.1 percent at 4,115.77 (close)

New York - Nasdaq: DOWN 0.7 percent at 12,086.27 (close)

London - FTSE 100: DOWN 0.1 percent at 7,593.00 (close)

Frankfurt - DAX: DOWN 0.8 percent at 14,445.99 (close)

Paris - CAC 40: DOWN 0.8 percent at 6,448.63 (close)

EURO STOXX 50: DOWN 0.5 percent at 3,788.93 (close)

Tokyo - Nikkei 225: UP 1.0 percent at 28,234.29 (close)

Hong Kong - Hang Seng Index: UP 2.2 percent at 22,014.59 (close)

Shanghai - Composite: UP 0.7 percent at 3,263.79 (close)

Dollar/yen: UP at 134.29 yen from 132.59 yen late Tuesday

Euro/dollar: UP at $1.0720 from $1.0703

Pound/dollar: DOWN at $1.2535 from $1.2592

Euro/pound: UP at 85.54 pence from 85.00 pence

Brent North Sea crude: UP 2.5 percent at $123.58 per barrel

West Texas Intermediate: UP 2.3 percent at $122.11 per barrel

burs-jmb/to

F.Müller--BTB