European Shares Decline On Rate Hike Fears
European stocks traded lower on Thursday after Federal Reserve Chair Jerome Powell reiterated his warning to lawmakers that the central bank may raise interest rates higher than previously anticipated.
During a second day of congressional testimony, Powell once again acknowledged that the U.S. central bank was wrong in initially thinking inflation was only the result of “transitory” factors.
Weaker-than-expected inflation data from China also pointed to a sluggish economic recovery in the country.
The pan European STOXX 600 was down 0.4 percent at 458.94 after closing flat with a positive bias on Wednesday.
The German DAX slipped 0.2 percent, France’s CAC 40 index declined 0.4 percent and the U.K.’s FTSE 100 was down 0.8 percent.
Italy’s Enel gave up 1 percent on news it will sell its Romanian operations to Greece’s Public Power Corp DEHr.AT (PPC) for 1.26 billion euros ($1.33 billion).
Swiss lender Credit Suisse plunged 4 percent after postponing publication of its annual report.
Fast-food giant Domino’s Pizza Group slumped 7.3 percent in London after reporting a drop in annual profit.
Event organizer Informa rallied 2.5 percent after buying Tarsus Group from private equity firm Charterhouse Capital Partners for $940 million.
DS Smith lost over 4 percent despite the packing company delivering Q3 trading in line with management expectations.
Insurer Aviva rose nearly 3 percent after hiking investor payouts.
Miners Anglo American, Antofagasta and Glencore fell 1-2 percent as copper prices fell on a stronger dollar.
Oil & gas firm BP Plc shed 0.7 percent and Shell dropped 1.3 percent as oil extended losses on demand worries.
Eutelsat gained about 1 percent in Paris after it signed a multi-orbit agreement with Intelsat to enhance connectivity solutions over Europe, the Middle East, and the Pacific, including OneWeb services.
German real estate firm LEG Immobilien plummeted 9.5 percent after suspending dividend for 2022.
Hugo Boss gave up 2.3 percent. After reporting record sales in the 12 months to 31 December 2022, the fashion house said it expects sales to rise “in the teens” percentage range in 2023.
On the economic front, France’s payroll employment increased in the fourth quarter reflecting the improvement in the private sector job creation, final data from the statistical office INSEE showed earlier today.
Overall payroll employment grew 0.2 percent or 44,000 in the fourth quarter. This was slower than the 0.3 percent or 84,100 jobs created in the third quarter.
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