European stock markets struggled to build momentum on Tuesday, following a sombre session in Asia.
In London, the FTSE 100 (^FTSE) close 0.5% lower, recovering slightly from earlier losses but still dragged lower by mining and banking stocks, while the French CAC (^FCHI) was tumbled almost 0.6% and the DAX (^GDAXI) in Frankfurt ended flat.
“If mining stocks are bellwether for the global economy, then investors need to sit up and take notice that the sector has been one of the worst performers in the past month,” AJ Bell investment director Russ Mould said.
“Metals and minerals producers were principally to blame for the FTSE 100 falling... in part caused by concerns about COVID spreading across Asia again and how that might affect commodities demand."
It came as the number of workers on UK payrolls rose above pre-pandemic levels in August, as vacancies also hit a record high.
According to figures from the Office for National Statistics (ONS), the number of employees on company payrolls rose a record 241,000 in August, while job openings rocketed 35% in the quarter to 1.03 million — the first time they have risen above 1 million.
Suren Thiru, head of economics at the British Chamber of Commerce (BCC), said: “The jobs market has continued its summer revival... but record vacancies also highlight the acute hiring crisis faced by many firms.
“With Brexit and COVID driving a more deep-seated decline in labour supply, the end of furlough is unlikely to be a silver bullet to the ongoing shortages.
“These recruitment difficulties are likely to dampen the recovery by limiting firms’ ability to fulfil orders and meet customer demand.”
Watch: Furlough scheme's end unlikely to dent record worker shortage, recruitment sector warns
It came as US inflation slowed last month, cooling slightly from July and coming in lower than economists' expectations.
The US Consumer Prices Index (CPI) rose by 5.3% in the 12 months to August, down from the 13-year high of 5.4% in July. Energy prices rose by 25% over the year, while the food index increased 3.7%.
On a monthly basis, prices rose by 0.3%, a slowdown on July’s 0.5%, the US Labour Department said.
Ambrose Crofton, global market strategist at JP Morgan Asset Management, said: "Much of today’s high inflation reading continues to be attributed to items associated with the re-opening of the economy and supply chain disruptions, although there are signs that these are peaking.
"Used cars, airline fares and hotel prices all fell in the month as the Delta variant dampened demand. The Federal Reserve has assessed that it views these pressures as temporary and should resolve themselves in the course of time — today’s details may reassure them in this assessment."
Deutsche Bank highlighted that over a 50 year period US inflation has averaged 3.9% per annum, which is the 20th lowest average of the 152 economies it has data for back to 1971.
"Only 45 economies have seen inflation average beneath 5% over this period, whilst 55 have an average above 10%. Switzerland has the best record at 2.2%, whilst Japan (2.4%) and Germany (2.6%) aren't far behind either," Jim Reid of Deutsche Bank said.
A gain for the S&P 500 and Dow Jones on Wall Street on Monday, after a five-day losing streak, failed to spur investors in Asia.
The Nikkei (^N225) in Japan climbed 0.7%, amid hopes for fresh stimulus, while other key markets lagged. In Hong Kong, the Hang Seng (^HSI) fell 1.5% and the Shanghai Composite (000001.SS) dipped 1.4%.
Watch: What is inflation and why is it important?