European Stocks Drifting Lower As Central Banks Hike Interest Rates

(RTTNews) - European stocks are down firmly in negative territory in early afternoon trades on Thursday, reacting to the Federal Reserve's hawkish comments, and policy decisions from the European Central Bank (ECB), the Bank of England (BoE) and the Swiss National Bank.

The ECB has raised interest rates by 50 basis points today, slowing the pace of increases after raising rates by 75 points at the previous two meetings. The bank says it expects to raise rates further as "inflation remains far too high and is projected to stay above the target for too long."

The BoE lifted its benchmark rate for the ninth consecutive meeting on Thursday but moderated the pace of tightening from the previous session's 75 basis point hike amid rising concerns that the UK economy is in recession.

The rate-setting committee of the BoE raised the Bank Rate by 50 basis points to 3.5%, the highest since October 2008.

Switzerland's central bank raised its key interest rate for the third straight meeting and said it cannot rule further tightening in the policy rate, to counter rising inflationary pressures and spread of inflation.

The Swiss National Bank raised its policy rate by 0.5 percentage points to 1%. The outcome of the meeting widely matched expectations.

After raising interest rate by 50 basis points on Wednesday, the Fed signaled more rate increases in the comining months, saying inflation is still at elevated levels.

The pan European Stoxx 600 is down 1.04%. The U.K.'s FTSE 100 is lower by 0.34%, Germany's DAX is declining 1.17% and France's CAC 40 is down 1.15%, while Switzerland's SMI is sliding 1.01%.

In the UK market, Polymetal International is down nearly 4%. Just Eat Takeaway.com, Associated British Foods, Melrose Industries, Burberry Group and DS Smith are down 2 to 3%.

HSBC Holdings, Barclays, Next, M&G, Natwest Group, Croda International and Prudential are also down sharply.

IAG is climbing nearly 2%. Land Securities, Berkeley Group, Taylor Wimpey, Pearson and Hikma Pharmaceuticals are also notably higher.

In Paris, WorldLine and Kering both are down more than 4. Hermes International, STMicroElectronics, Essilor, LVMH, BNP Paribas, Veolia, Publicis Groupe and Dassault Systemes are down 1 to 3%.

Carrefour, Unibail Rodamco, Thales, Orange and Renault are up in positive territory.

In the German market, Zalando is declining 4.4%. Deutsche Post, HelloFresh, Adidas, Puma, Merck, Siemens Healthineers, Infineon Technologies and Covestro are down 2 to 4%.

In economic releases today, data from Destatis showed Germany's wholesale price inflation eased in November to reach its lowest level in more than a year.

The wholesale price index climbed 14.9% year-over-year in November, slower than the 17.4% surge in October. Prices have been rising since January last year.

France's consumer price inflation held steady at its record high in November as initially estimated, latest data from the statistical office Insee showed. Consumer price inflation came in at 6.2% in November, the same as in October, which was the strongest inflation since 1985.

The confidence among French manufacturers remained steady in November, as an improvement in the assessment of the past production and future selling prices were offset by the weaker view on foreign demand and increased concerns of recession ahead.

The manufacturing confidence index came in at 101 in December, unchanged from November, survey results from the statistical office Insee showed on Thursday.