MILAN, Feb 6 (Reuters) - European shares fell to their lowest level since August 2017 on Tuesday as a global sell-off in equities deepened and volatility spiked on growing worries over inflation and rising bond yields.
All sectoral indexes were trading in negative territory, pushing the pan-European STOXX 600 index down for the seventh straight session.
The index was down 2.6 percent by 0814 GMT, while Britain’s FTSE dropped 2.5 percent and Germany’s DAX fell 2.7 percent. The euro STOXX volatility index hit its highest level since April 2017.
“Price action is clearly driven by technical factors, tied to a brutal awakening of stock volatility,” said Alessandro Balsotti, head of asset management at JCI Capital Ltd. “We are undoubtedly in uncharted waters.”
Investors fear a comeback of inflation would prompt central banks to tighten monetary policies faster than expected, scaling back from years of stimulus that boosted stock valuations and lifted European equities to 2 year highs in January.
Among the top fallers on Tuesday were Ocado, down 7.1 percent, after the British online supermarket missed forecasts with flat full-year core earnings, while Babcock declined 4 percent after lowering its revenue forecasts.
Among the few stocks in positive territory, Intesa Sanpaolo was up 0.4 percent after Italy’s biggest retail bank pledged to halve its soured loans and grow revenue strongly while cutting costs under a new four-year plan. Traders said the market welcomed Intesa’s dividend plans.
AMS jumped 7.9 percent after the chipmaker reported a surge in fourth-quarter profit as the Austria-based group benefited from rising demand for the sensors it makes for smartphone producers such as Apple.
Reporting by Danilo Masoni, Editing by Helen Reid