Retailers drag European shares lower after overnight Wall St jolt By Reuters

© Reuters. FILE PHOTO: The World's largest foreign exchange company rankingsGerman share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, May 17, 2022. REUTERS/Staff

(Reuters) - European shares slumped on Thursday, following a sharp sell-off on the Wall Street overnight, as dismal results from retailers underlined the hit from surging inflation on the world's biggest economy.

Tracking U.S. peers, regional retailers fell 2.2% and were the biggest drags in the pan-European STOXX 600 index that slid 1.2% by 0713 GMT, extending losses after falling 1% on Wednesday.

Losses were broad-based, with all major sub-sectors in the red.

Main U.S. indexes tumbled between 3.6% and 4.7% on Wednesday, after Target Corp (NYSE:TGT)'s quarterly profit halved and the retailer warned of a bigger margin hit on rising fuel and freight costs. [.N]

This followed Walmart (NYSE:WMT) cutting its profit view, as consumers stuck to essentials with inflation eating into their spending capacity.

Along with the central banks' ongoing stimulus reduction and concerns about the fallout from the Russia-Ukraine war, investors fled to the safety of bonds. [MKTS/GLOB][US/] [GVD/EUR]

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