European Stocks Settle Sharply Lower As Rate Hikes, Hawkish Comments Hurt Sentiment

(RTTNews) - European stocks tumbled on Thursday and most of the markets across the region ended with sharp losses, hitting multi-week lows, as interest rate hikes and hawkish comments by several central banks hurt sentiment.

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 ended 2.85% down. The U.K.'s FTSE 100 dropped 0.93%, Germany's DAX tumbled 3.28% and France's CAC 40 drifted down 3.09%, while Switzerland's SMI fell 2.51%.

Among other markets in Europe, Austria, Belgium, Denmark, Finland, Iceland, Ireland, Netherlands, Poland, Russia, Spain and Sweden ended sharply lower.

Czech Republic, Greece, Norway and Portugal also closed weak, while Turkiye bucked the trend and moved up sharply.

In the UK market, Ocado Group, Smith (DS), Segro, Associated British Foods, Barclays, Burberry Group, Next and Convatec lost 3 to 4.2%.

Melrose Industries, Just Eat Takeaway.com, Airtel Africa, RS Group, Diageo, Prudential, Natwest Group, Frasers Group and Coca Cola HBC also ended sharply lower.

IAG climbed more than 2%. Berkeley Group Holdings, Barratt Developments, Taylor Wimpey, Pearson and Rio Tinto also ended notably higher.

In the German market, Zalando, HelloFresh and Deutsche Post tumbled 6.8 to 8%.

Siemens Healthineers, Puma, Adidas, Infineon Technologies, Porsche Automobil, SAP, Merck, Siemens, Daimler, Brenntag, Volkswagen, Fresenius, Deutsche Bank, Allianz and E.ON lost 2 to 6%.

In Paris, WorldLine, Kering, Essilor, Hermes International, STMicroElectronics, Schneider Electric, L'Oreal, Dassault Systemes, Saint Gobain, LVMH, Credit Agricole and BNP Paribas lost 3 to 7%.

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.