LONDON: French and German stock markets hit record peaks Thursday with the euro weakened by dimmed expectations of an ECB rate hike despite soaring inflation, while London extended losses.
Frankfurt's benchmark DAX index and the Paris CAC 40 scaled the latest pinnacles also despite rising Covid-19 infections in much of Europe.
The European single currency held firm after tanking on Wednesday to $1.1264 -- the lowest level since July 2020.
Oil prices briefly touched one-month lows Thursday on lower demand concerns.
"The DAX and CAC are being supported by the receding likelihood of a European Central Bank (ECB) rate hike next year, which is also dragging on the euro," said CMC Markets analyst Michael Hewson.
IG analyst Joshua Mahony added that "fears of a resurgence in Covid cases in mainland Europe have done little to perturb investors" in the region.
A weaker euro tends to lift eurozone stocks because it makes its exports cheaper for buyers using stronger currencies.
ECB president Christine Lagarde this week said the bank did not expect to raise interest rates next year, in contrast to much sooner tightening expected by the Bank of England and the US Federal Reserve.
Stubborn fears over runaway global inflation continue to stalk trading floors.
But while eurozone inflation will hit a record high in November it is expected to decline over the course of next year, a senior ECB policymaker predicted Wednesday.
Asian bourses fell Thursday, tracking losses on Wall Street Wednesday fuelled also by talk that some central banks will have to tighten their monetary policies quicker than anticipated.
Data out Wednesday showed inflation close to a decade-high in Britain and an 18-year peak in Canada.
That came one week after news that US inflation surged to the highest level since 1990.
European stocks extend record rally
Investors are fearful that massive financial stimulus -- coupled with resurgent post-lockdown demand and supply-chain snarl-ups -- could send consumer prices rocketing even further.
Key figures around 1200 GMT
London - FTSE 100: DOWN 0.2 percent at 7,277.83 points
Frankfurt - DAX: UP 0.1 percent at 16,263.98
Paris - CAC 40: UP 0.2 percent at 7,169.16
EURO STOXX 50: UP 0.1 percent at 4,403.49
Tokyo - Nikkei 225: DOWN 0.3 percent at 29,598.66 (close)
Hong Kong - Hang Seng Index: DOWN 1.3 percent at 25,319.72 (close)
Shanghai - Composite: DOWN 0.5 percent at 3,520.71 (close)
New York - Dow: DOWN 0.6 percent at 35,931.05 (close)
Euro/dollar: UP at $1.1348 from $1.1319 at 2200 GMT
Pound/dollar: UP at $1.3493 from $1.3487
Euro/pound: UP at 84.08 pence from 83.93 pence
Dollar/yen: UP at 114.18 yen from 114.08 yen
Brent North Sea crude: DOWN 0.2 percent at $80.14 per barrel
West Texas Intermediate: DOWN 0.3 percent at $78.05 per barrel