RCA Telegram News California - Stocks slide, oil rises as Germany slashes growth outlook

Germany was the main eurozone laggard, the DAX index sliding 1.6 percent two hours from the close after Berlin slashed its economic growth forecast for 2022, warning the war in Ukraine and soaring energy prices would take a toll on Europe's biggest economy.

The German government's economic advisers said it expected gross domestic product to expand 1.8 percent year-on-year, down from a forecast of 4.6 percent.

- Inflation woes deepen gloom -

Deepening the gloom was news that German inflation had reached a four-decade high as consumer prices rose by 7.3 percent annually, up from 5.1 percent in February, with the Ukraine conflict having had a "considerable impact on the high rate", according to federal statistics agency Destatis.

The last time such a high rate was recorded was in the autumn of 1981 in West Germany, when oil prices increased "sharply" as a consequence of the Iran-Iraq war, the agency said.

Germany's fellow eurozone economy Spain likewise saw its inflation rate hit an almost four-decade high, official data showed in jumping to 9.8 percent in March from 7.6 percent in February, its highest level since 1985.

The war in Ukraine has seen oil soar anew and Brent North Sea crude and West Texas Intermediate both added some three percent Wednesday on persistent supply worries linked to Ukraine.

Analysts said there was an expectation that OPEC and other major producers including Russia would decide against lifting oil output at their monthly meeting on Thursday.

- Ukraine "scepticism" -

"Hopes of a speedy resolution to the Russia-Ukraine conflict have been dashed again, with scepticism surrounding the latest reports of a slowdown of the Russian aggression," noted Richard Hunter, head of markets at Interactive Investor.

"Russia's war of aggression against Ukraine and energy prices are drastically worsening the economic outlook," said the German Council of Economic Experts.

Outside the eurozone, London's main stocks index was just in the green on the heels of a mixed showing in Asia while on Wall Street the Dow Jones index was flat shortly after the opening while the tech-heavy Nasdaq was off 0.4 percent ahead of Friday's release of US jobs data for a fresh snapshot of the world's top economy.

A strong reading could spur the Federal Reserve to act more aggressively to fight inflation, with some commentators predicting several half-point US interest rate hikes this year.

Russia's pledge to "radically" wind down military activity around two Ukrainian cities including the capital Kyiv, had sparked a Tuesday rally on US and European markets while briefly sending oil prices tumbling.

But world leaders greeted the news with scepticism, with US President Joe Biden saying he wanted to see if Moscow would "follow through" on a promise to de-escalate.

Moscow then Wednesday played down hopes of a breakthrough following talks in Istanbul.

"We cannot state that there was anything too promising or any breakthroughs," Kremlin spokesman Dmitry Peskov told reporters. "There is a lot of work to be done."

- Key figures around 1450 GMT -

New York - DOW: FLAT at 35,303.17 points

London - FTSE 100: UP 0.2 percent at 7,552.86

Frankfurt - DAX: DOWN 1.6 percent at 14,595.91

Paris - CAC 40: DOWN 0.9 percent at 6,731.97

EURO STOXX 50: DOWN 1.1 percent at 3,957.46

Tokyo - Nikkei 225: DOWN 0.8 percent at 28,027.25 (close)

Hong Kong - Hang Seng Index: UP 1.4 percent at 22,232.03 (close)

Shanghai - Composite: UP 2.0 percent at 3,266.60 (close)

Brent North Sea crude: UP 2.9 percent at $113.41 per barrel

West Texas Intermediate: UP 3.9 percent at $108.29 per barrel

Euro/dollar: UP at $1.1165 from $1.1090 late Tuesday

Pound/dollar: UP at $1.3179 from $1.3094

Euro/pound: UP at 84.71 pence from 84.66 pence

Dollar/yen: DOWN at 121.81 yen from 122.77 yen

Y.Schmitz--RTC