In US economic data, housing starts fell 0.2% from a 1.728 million annual rate to 1.724m in April (survey: 1.765m). Building permits fell 3.2% to 1.819m (survey: 1.812m).

European sharemarkets were weaker on Wednesday on concerns about rising inflation rates and the scale of monetary policy tightening required to address rising prices. Data showed UK inflation rising to the highest levels in 40 years. Technology shares fared worst, down by 2.7%, while basic materials fell by 1.2%. But shares in Commerzbank rose 3.1% with UniCredit up 2% on merger speculation. The pan-European STOXX 600 index fell by 1.1%. The German Dax index fell by 1.3% while the UK FTSE index lost 1.1%. In London trade, shares in Rio Tinto fell by 1.8% while BHP shares fell by 1.6%.

US sharemarkets slumped on Wednesday. Retailer Target said its first-quarter profit fell by half and the company warned of a bigger margin hit on rising fuel and freight costs. Shares in Target fell by
24.9%, the biggest drop since the 1987 sharemarket crash. Earlier on Tuesday, Walmart trimmed its profit forecast, its shares falling11.4%. Shares in Walmart fell a further 6.8% on Wednesday. Shares in Tesla fell by 6.8% and shares in Apple lost 5.6%. The Dow Jonesindex lost 1,165 points or 3.6%. The S&P 500 index lost 4.0% andthe Nasdaq index fell by 566 points or 4.7%. * US treasuries rose on Wednesday (yields lower). An auction of 20-year bonds met with strong demand at a yield of 3.29%. US 10-year yields fell by 9 points to near 2.88%. And US 2-year yields fell by 3 points to near 2.66%.

Major currencies were mixed against the US dollar in European and US trade. The Euro fell from highs near US$1.0535 to lows near US$1.0460 and was near session lows at the US close. The Aussie dollar fell from highs near US70.35 cents to lows near US69.50 cents and was near session lows at the US close. But the Japanese yen lifted from 129.35 yen per US dollar to JPY128.00 and was near JPY128.20 at the US close.

Global oil prices fell by 2.5% on Wednesday. Data showed that refiners ramped up output with capacity use on both the East Coast and Gulf Coast above 95%. The sharp fall on Wall Street also weighed on trader sentiment. And traders followed reports suggesting that the US could ease sanctions against Venezuela, allowing the oil producer to lift output. The Brent crude price fell by US$2.82 or 2.5% to US$109.11 a barrel. And the US Nymex crude price fell by US$2.81 or 2.5% to US$109.59 a barrel.

Base metal prices fell by between 0.8% and 3.1% on Wednesday with nickel down the least and tin down the most.

The gold futures price fell by US$3.00 or 0.2% to US$1,815.90 an ounce. Spot gold was trading near US$1,816 an ounce at the US close. The iron ore futures price fell by US$1.66 or 1.3% to US$129.92 a tonne.

Ahead: In Australia, the April labour market figures are released. In the US, data on existing home sales are released with weekly jobless claims, the leading index and the Philadelphia Federal Reserve manufacturing index.

Originally published by CommSec