European shares fall before German inflation data

European shares tumbled on Thursday, with some companies, including Sweden’s H&M, warning of the repercussions of rising inflation and costs on their activities, negatively affecting sentiment before releasing highly anticipated German inflation data.

The pan-European Stoxx 600 index was down 1.7 percent by 0759 GMT after it failed to follow the path of an increase on Wall Street on Wednesday.

Shares of H&M fell 4.5 percent after the world’s second-largest clothing retailer posted a lower-than-expected profit on higher production costs, slowing consumer spending and its exit from Russia.

Shares in Inditex, owner of the Zara brand, fell 2.2 percent. The broader Stoxx index of retail stocks fell 4.3 percent.

Shares in Polish e-commerce Allegro plunged 6.8 percent after the company cut its full-year profit forecast for the second time this year and warned that rising inflation could dampen demand.

Next, shares fell 10 percent after the clothing retailer cut its profit and sales forecast.

Shares in German kitchenware maker Rational jumped 10.8 percent after the company raised its sales and profit forecast for 2022.