European Shares Extend Slide As Rate Hike Fears Mount

(RTTNews) - European stocks fell sharply on Thursday to hit seven-week lows amid worries that aggressive rate hikes by the Federal Reserve and other central banks in Europe and Asia will dent economic growth.

Markets are betting that the U.S. Federal Reserve and the ECB will both raise their key borrowing costs by 75 basis points when they meet later this month.

Meanwhile, closely watched gauges of manufacturing in Europe and Asia fell in August, raising worries over a possible recession.

The pan-European Stoxx Europe 600 was down 1.7 percent at 408.19 after losing 1.1 percent on Wednesday.

The German DAX fell 1.5 percent, France's CAC 40 index lost 1.7 percent and the U.K.'s FTSE 100 was down 1.5 percent.

Miners Anglo American, Antofagasta and Glencore lost 4-7 percent in London as metals prices tumbled following weak manufacturing data from China.

Rio Tinto gave up 3.4 percent after it agreed to buy out Turquoise Hill Resources in a deal valued at about $3.3 billion.

Government services provider Serco dropped 1.4 percent after it agreed to acquire immigration services provider ORS, which provides services in Switzerland, Germany, Austria and Italy.

Reckitt Benckiser plunged 4.4 percent. The consumer goods company said its CEO Laxman Narasimhan has decided to leave for personal reasons to relocate back to the United States.

Lender Barclays fell 1.3 percent after selling its remaining 63 million shares in South African lender Absa Group.

French spirits group Pernod Ricard fell about 1 percent despite posting better-than-expected annual results.

Luxury stocks were coming under selling pressure, with Hermes and LVMH declining more than 3 percent, after a private survey showed China's manufacturing sector slipped into contraction for the first time in three months in August amid weakening demand.

German flag carrier Deutsche Lufthansa fell 3.4 after a pilots' trade union decided on a day-long strike for Friday, September 2, following a warning strike by ground staff in July.