{"id":63593,"date":"2026-06-23T04:38:16","date_gmt":"2026-06-23T08:38:16","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-face-bear-market-milestone-as-ecb-warns-of-inflation-persistence\/63593\/"},"modified":"2026-06-23T04:38:16","modified_gmt":"2026-06-23T08:38:16","slug":"global-markets-face-bear-market-milestone-as-ecb-warns-of-inflation-persistence","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-face-bear-market-milestone-as-ecb-warns-of-inflation-persistence\/63593\/","title":{"rendered":"Global Markets Face Bear Market Milestone as ECB Warns of Inflation Persistence"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>Hang Seng China Enterprises Index enters a bear market<\/strong>, falling <strong>20%<\/strong> from its October peak amid weak growth and a tech sector sell-off.<\/li>\n<li><strong>ECB official Jos\u00e9 Luis Escriv\u00e1 warns of &quot;very big&quot; persistence<\/strong> in services inflation, citing global uncertainty as a major hurdle for future rate decisions.<\/li>\n<li><strong>HSBC downgrades Hermes (<a href=\"\/stock\/RMS\">RMS<\/a>) to Hold<\/strong>, slashing the price target to <strong>EUR 1,870<\/strong> as the luxury giant&#39;s sales growth slows to single digits.<\/li>\n<li><strong>Iran maintains a hard line on defense<\/strong>, stating its missile capabilities are non-negotiable despite progress in preliminary technical talks with the U.S. in Switzerland.<\/li>\n<\/ul>\n<h2>Market Turmoil in Asia<\/h2>\n<p>The <strong>Hang Seng China Enterprises Index<\/strong> officially entered bear market territory on Tuesday, marking a <strong>20% decline<\/strong> from its high on October 2, 2026. The slump is driven by deepening concerns over China&#39;s economic recovery and the continued underperformance of heavyweights like Alibaba (<a href=\"\/stock\/BABA\">BABA<\/a>) and Tencent (<a href=\"\/stock\/TCEHY\">TCEHY<\/a>). <em>Investors are increasingly wary of the structural weaknesses in the benchmark, which lacks the AI-driven hardware growth seen in neighboring markets like Taiwan and South Korea.<\/em><\/p>\n<h2>ECB Signals Inflation Caution<\/h2>\n<p>European Central Bank (ECB) Governing Council member <strong>Jos\u00e9 Luis Escriv\u00e1<\/strong> highlighted significant challenges for the Eurozone, noting that <strong>services inflation<\/strong> is exhibiting &quot;very big&quot; persistence. Speaking in Barcelona, Escriv\u00e1 emphasized that <strong>global uncertainty<\/strong>\u2014particularly regarding energy costs and Middle East tensions\u2014makes the central bank&#39;s decision-making process increasingly difficult. While the ECB recently implemented a <strong>25 basis point hike<\/strong>, officials remain divided on whether further tightening is necessary to reach the <strong>2% medium-term target<\/strong>.<\/p>\n<h2>Luxury Sector Cools<\/h2>\n<p>In a blow to the luxury sector, <strong>HSBC<\/strong> downgraded Hermes (<a href=\"\/stock\/RMS\">RMS<\/a>) from Buy to <strong>Hold<\/strong>, lowering its price target to <strong>EUR 1,870<\/strong> from EUR 2,100. The bank noted that Hermes&#39; organic sales growth of <strong>5.6%<\/strong> in the first quarter failed to significantly outpace its peers for the first time in recent history. <em>Analysts pointed to a shift away from double-digit growth as geopolitical tensions and cooling demand from aspirational consumers weigh on the sector&#39;s premium valuations.<\/em><\/p>\n<h2>Geopolitical Developments in the Middle East<\/h2>\n<p>Iranian Foreign Ministry spokesperson <strong>Esmaeil Baghaei<\/strong> reaffirmed that Tehran&#39;s <strong>missile and defensive capabilities<\/strong> will not be subject to negotiations with any party. This statement comes as Iranian Foreign Minister <strong>Abbas Araghchi<\/strong> arrived in Pakistan for separate talks ahead of a planned visit by the Iranian President. While technical talks in Switzerland between the U.S. and Iran reportedly concluded with some progress on maritime safety in the <strong>Strait of Hormuz<\/strong>, Iran insists that all clauses of the current Memorandum of Understanding (MoU) must be achieved before formal nuclear negotiations begin.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Hang Seng China Enterprises Index enters a bear market, falling 20% from its October peak amid weak growth 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