European shares hit two-week lows on Thursday after the European Central Bank (ECB) signaled a higher interest rate hike in September, raising its inflation forecast and lowering economic growth expectations. for the year.
The eurozone stock index STOXX, which had recouped nearly all of the session’s losses after the ECB held its benchmark interest rate, quickly reversed course and dropped 1.6%.
The pan-European STOXX 600 index closed down 1.36%, at 434.38 points. All of Europe’s major exchanges dropped 1% or more.
The central bank said it would end a long-term bond-buying program on July 1 and raise interest rates by 0.25 percentage point — for the first time in a decade — next month and possibly by a wider margin in September.
The ECB said inflation is expected to average 6.8% this year, well above the 5.1% forecast in March and the institution’s 2% target, while economic growth for the year has been reduced to 2. 8% from the previous projection of 3.7%.
Losses in Europe were widespread. Banks in the region, which would have been the main beneficiaries of higher interest rates, fell to 1.2%.
- In London, the Financial Times index dropped 1.54%, to 7,476.21 points;
- In Frankfurt, the DAX index fell 1.71% to 14,198.80 points;
- In Paris, the CAC-40 index lost 1.40%, at 6,358.46 points;
- In Milan, the Ftse/Mib index had a devaluation of 1.90%, to 23,776.97 points;
- In Madrid, the Ibex-35 index registered a drop of 1.49%, to 8,711.20 points;
- In Lisbon, the PSI20 index depreciated by 0.52%, to 6,301.73 points.
Source: CNN Brasil
