By Marc Jones
LONDON (Reuters) - Heavy falls in European and Asian stock markets followed Wall Street's worst day since mid-2020 on Thursday, as stark warnings from some of the world's biggest retailers underscored just how hard inflation is biting.
Bond markets rallied in the dive for safety and on bets that interest rate rises may get recalibrated, but it was the gloom striking down equities after Wednesday's $25 billion wipeout in U.S. retailer Target's shares that dominated the action. [.N]
Europe opened down 1.8%, led by a 2.2% fall in its retail sector [.EU], while scarlet red U.S. futures and some sharp overnight drops in China tech firms [.SS] put 1-1/2 year lows back in focus for MSCI all-country world.
"Target and Walmart coming out with disappointing numbers has really, really spooked people," said Close Brothers Asset Management's Chief Investment Officer Robert Alster.
"We are going to see a raft of downgrades to U.S. GDP (forecasts) now... it really looks like we are running into a faster slowdown than we expected."