LONDON, May 19 Reuters Heavy falls in European and Asian stock markets followed Wall Street39;s worst day since mid2020 on Thursday, as stark warnings from some of the world39;s biggest retailers underscored just how hard inflation is biting.

Bond markets rallied in the dive for safety and on bets that interest rate rises may get recalibrated, but it was the gloom striking down equities after Wednesday39;s 25 billion wipeout in U.S. retailer Target39;s shares that dominated the action.

Europe opened down 1.8, led by a 2.2 fall in its retail sector , while scarlet red U.S. futures and some sharp overnight drops in China tech firms put 112 year lows back in focus for MSCI allcountry world. 

Target and Walmart coming out with disappointing numbers has really, really spooked people, said Close Brothers Asset Management39;s Chief Investment Officer Robert Alster.

We are going to see a raft of downgrades to U.S. GDP forecasts now… it really looks like we are running into a faster slowdown than we expected.

The SP 500 had lost 4 on Wednesday while the Nasdaq had fallen almost 5 as interestrate sensitive megacap stocks Amazon, Nvidia and Tesla dropped close to 7 and while Apple tumbled 5.6.

MSCI39;s broadest index of AsiaPacific shares exJapan then snapped four days of gains as it slumped 1.8, dragged down by a 1.65 loss for Australia39;s resourceheavy index, a 2.5 drop in Hong Kong. Tokyo39;s Nikkei shed 1.9 too.

Tech giants listed in Hong Kong were hit particularly…