GLOBAL equities mostly slid yesterday on auto sector woes and economic fears about the prospect of more interest rate hikes aimed at cooling high inflation.

Share prices of carmakers were hit hard after Tesla posted tumbling first-quarter profits as steep price cuts ate into margins at Elon Musk’s electric vehicle company.

Wall Street slid lower, with the S&P 500 finishing down 0.6%.

Europe’s main equity markets were mostly lower after a mixed session in Asia.

The dollar fell against its main rivals and crude oil tanked more than 2%.

“In what has been a pretty directionless week so far, European markets are on the back foot as a slide in automakers, and lower oil prices weigh on the wider market,” said Michael Hewson, chief market analyst at CMC Markets UK.

He said oil prices were being dragged down on worries about demand on the heels of weakening US data.

Stubbornly high UK inflation and worries over more central bank moves to tame rampant consumer prices had dented market sentiment on Wednesday.

Higher borrowing costs curb consumer spending and ramp up the cost of credit for businesses and individuals alike, derailing economic activity.

“Investors are once again worried about the outlook for the global economy,” added Russ Mould, investment director at AJ Bell.

“Markets have stalled over the past few days, with the latest corporate updates failing to move the dial.”

Carmakers hit the skids

Shares in Tesla slumped nearly 10%, but shares in all carmakers took a hit on fears of a price war. 

Shares in Ford and GM both dropped around 3%.

In Europe, French giant Renault lost nearly 8% despite strong first-quarter earnings, while Stellantis – owner of Chrysler, Fiat, Jeep, Maserati, Peugeot and other brands – sank more than 5%.

In Frankfurt, shares in BMW and Mercedes-Benz both fell more than 3% and Volkswagen dropped 2.5%.

“More price cuts to come affects all,” Finalto analyst Neil Wilson told AFP.

In the telecoms sector, shares in Nokia tumbled more than 9% after the Finnish equipment manufacturer reported weaker than expected earnings as cash-strapped consumers reined in spending.

Results from US regional banks were also in focus after three went under last month and troubled European giant Credit Suisse was taken over by UBS.

Several regional US banks – including KeyCorp, Zions Bancorporation and Comerica – dropped between 2 and 5% following earnings reports that showed the impact of an industry panic after the March collapse of Silicon Valley Bank.

Key figures around 2050 GMT

New York - Dow: DOWN 0.3% at 33,786.62 (close)

New York - S&P 500: DOWN 0.6% at 4,129.79 (close)

New York - Nasdaq: DOWN 0.8% at 12,059.56 (close)

London - FTSE 100: UP less than 0.1% at 7,902.61 (close) 

Frankfurt - DAX: DOWN 0.6% at 15,795.97 (close)

Paris - CAC 40: DOWN 0.1% at 7,538.71 (close)

EURO STOXX 50: DOWN 0.2% at 4,384.86 (close) 

Tokyo - Nikkei 225: UP 0.2% at 28,657.57 (close)

Hong Kong - Hang Seng Index: UP 0.1% at 20,396.97 (close)

Shanghai - Composite: DOWN 0.1% at 3,367.03 (close)

Euro/dollar: UP at US$1.0972 from US$1.0955 on Wednesday

Pound/dollar: UP at US$1.2442 from US$1.2439

Dollar/yen: DOWN at  ¥134.24 from ¥134.72

Euro/pound: UP at 88.15 pence from 88.07 pence

West Texas Intermediate: DOWN 2.4% at US$77.29 per barrel

Brent North Sea crude: DOWN 2.4% at US$81.10 per barrel – AFP, April 21, 2023.