European stocks hit one-week lows on Thursday after the Federal Reserve hinted at continued interest rate hikes going forward, dampening hopes of a moderation in its aggressive fight against inflation.
The pan-European STOXX 600 fell 0.9%, posting its worst daily performance in four weeks, with interest-sensitive tech and real estate stocks down 2.3% and 2.9%, respectively.
While most of the major sector indices fell, bank and insurance stocks held firm, rising 0.4% and 0.2%.
The Fed made its fourth straight rate hike of 75 basis points on Wednesday and said the “final level” of the policy rate could be higher than previously estimated.
However, Chair Jerome Powell has signaled that future highs may come at lower levels.
European equity markets rose on three of the four days leading up to the Fed’s decision, helped by more positive-than-expected corporate earnings.
However, economic data since then has provided further evidence that the eurozone is gradually slipping into recession.
As eurozone inflation hits new highs, the European Central Bank (ECB) has taken similar steps to its counterpart across the Atlantic in maintaining its rapid cycle of rising interest rates as its deposit rate is expected to reach to just under 2.9% in 2023.
On the other hand, the Bank of England has warned that the UK faces a long recession and borrowing costs are likely to rise less than expected after raising interest rates by 75 basis points, the highest since 1989.
Source: CNN Brasil
Joe Jameson, a technology journalist with over 2 years of experience, writes for top online news websites. Specializing in the field of technology, Joe provides insights into the latest advancements in the industry. Currently, he contributes to covering the world stock market.