'Ugly, ugly scenes': European stock markets dive as global sell-off continues

European stocks sold off on Monday, with major markets losing more than 1%.
Falls follow a major drop in the USA on Friday after the best wage growth numbers since 2009 sparked fears of higher than expected inflation.
The sell-off also impacted Asia, with Japan's Nikkei down 2.5% on Monday.

LONDON — European stocks sold off during Monday trading as fears over rising inflation spread across the world.

The majority of major indices fell more than 1% from their closing price on Friday on Monday morning and remained substantially lower as the day progressed.

The UK's blue-chip index, the FTSE 100, closed down 1.4% lower at 7,336.25 points.

The falls follow a major sell-off in the US stock market on Friday, which subsequently spread into Asian trading overnight on Monday.

As Mike van Dulken, head of research at Accendo Markets, notes, Monday's sell-off "derives from Friday’s sharply lower close on Wall St flowing into Asia last night (Japan -2.5%, Australia -1.5%) after the strongest US wage growth in over eight and a half years heightened fears of hotter inflation that may push the US Federal Reserve to hike rates more/faster than expected.

"This added fuel to a bond market sell-off, pushing US 10yr Treasury bond yields closer to the magic 3% level (unseen since 2013) which will only increase borrowing costs for corporates following years of cheap financing, thus ushering equities further from recent highs."

"There were ugly, ugly scenes after the bell, as the market-wide sell-off gathered pace on fears that global interest rates are, sooner rather than later, going to be heading higher," Connor Campbell, an analyst at Spreadex said in an email.

Here's the scoreboard in Europe at around 4.35 p.m. GMT:

Britain's FTSE 100: down 1.4% to 7,336.25.
Germany's DAX: down 0.80% to 12,683.30.
France's CAC 40: down 1.52% to 5,283.54.
Italy's FTSE MIB: down 2.99% to 22,838.70.
Spain's IBEX 35: down 1.6% to 10,048.10.

Monday's European sell-off is broad-based, with no individual sector taking the full brunt of losses. In Britain's FTSE 100, the biggest losers include Randgold Resources (down 7.4%), Rolls-Royce (down 2.8%), Vodafone (down 4%), and G4S (down 3.2%).

Market fears reflect the view of Karen Ward, the chief European strategist at JPMorgan Asset Management, who told Business Insider in an interview in January that the biggest challenge to the markets right now is inflation rising quicker than expected.

"Thoughts will turn towards a much less risk-favourable environment quite quickly," should inflation rise faster than expected, Ward told BI.

The sell-off continued in US trade at the open, with all three major American indexes slipping further on Monday.