Investing.com - European stock markets fell sharply after the open on Wednesday, as investors continued to monitor movements on China's volatile stock market.
The Shanghai Composite took investors on another volatile ride on Wednesday, tumbling by as much as 5% after the open, before paring losses after the midday break to finally end up 1.2% as bargain buyers swooped in to take advantage of cheap valuations.
Chinese stock markets slumped 6% a day earlier amid growing concerns over the health of the Asian nation's economy and worries that policymakers may allow the yuan to continue to depreciate, fueling fears over a currency war that could destabilize the global economy.
During European morning trade, the EURO STOXX 50 shed 30 points, or 0.84%, France’s CAC 40 edged down 44 points, or 0.88%, Germany’s DAX 30 lost 105 points, or 0.96%, while London's FTSE 100 dropped 50 points, or 0.77%.
Carlsberg (COP:CARLa) shares tanked 7% after the Danish brewer reported second-quarter operating profit below expectations and cut its full-year outlook due to a "deteriorating macroeconomic climate" in Russia and Ukraine.
Glencore (LONDON:GLEN) said first-half earnings fell 29% from the same period a year earlier as sliding metal and oil prices weighed and said capital spending next year was expected to be lower than this year.
Elsewhere, U.S. equity markets pointed to a moderately lower open as investors looked ahead to the release of minutes from the Federal Reserve's latest policy meeting later in the session for further hints on the timing of a U.S. rate hike.
The Dow futures were down 44 points, or 0.24%, S&P 500 futures dropped 5 points, or 0.23%, while the Nasdaq 100 futures declined 15 points, or 0.33%.
Traders are also awaiting U.S. inflation data due later in the day. The Commerce Department is expected to report at 8:30AM ET that consumer prices rose by 0.2% in July, after increasing 0.3% in June. Core inflation is forecast to gain 0.2%, after rising 0.2% a month earlier.
Data on Tuesday showed that U.S. housing starts rose to an almost eight-year high in July, supporting the case for higher interest rates.
Despite the recent batch of upbeat U.S. economic data, some traders believe the Fed could postpone raising interest rates next month as officials are likely to remain concerned over global growth and inflation pressures due to China’s shock currency devaluation move and weak commodity prices.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 96.79 early Wednesday, down 0.2% for the day.
Meanwhile, oil prices were stuck near six-year lows amid ongoing concerns over a global supply glut in the face of weakening demand.