European shares retreat on Fed’s rate hike indicationwritten by Bella Palmer
The pan-European Stoxx 600 declined 1%, with tech stocks dropping 3% to lead losses as all sectors slid into negative territory except banks, which added 0.6%
European shares retreated on Thursday as global markets react badly to the latest monetary policy decision from the U.S. Federal Reserve.
The pan-European Stoxx 600 declined 1% in early trade, with tech stocks dropping 3% to lead losses as all sectors slid into negative territory except banks, which added 0.6%.
The Stoxx 600 was down 0.4% by 9.30 a.m. GMT.
In terms of individual share price movement, Deutsche Bank added 4.7% after defying market expectations to post a profit for the fourth quarter of 2021, as investment bank revenues rose.
The German lender said profit attributable to shareholders came in at 145 million euros ($162.7 million) for the final three months of the year — a sixth consecutive quarter of profit and almost triple its profit for the same period in 2020.
At the bottom of the European blue chip index, British boot brand Dr. Martens dropped more than 16% after its quarterly earnings report.
Along with Deutsche Bank, earnings in Europe on Thursday came from Unicredit, LVMH, SAP, Banco Sabadell, easyJet, Diageo and STMicroelectronics. Renault provided a strategic update on the Nissan/Mitsubishi alliance.
Global markets are reacting badly to the Federal Reserve’s indication on Wednesday that it could soon raise interest rates for the first time in more than three years.
The Fed’s policymaking group said a quarter-percentage point increase to its benchmark short-term borrowing rate is likely forthcoming. It would be the first increase since December 2018.
The post-meeting statement from the Federal Open Market Committee (FOMC) did not provide a specific time for when the increase will come, though indications are that it could happen as soon as the March meeting.
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