European stock markets continued to weigh heavily on Friday, following the fall of indices in the US and Asia, as the prospect of higher interest rates continues to exert strong pressure on global markets.
Wall Street indicators closed yesterday at the low of the day, although they were found to be gaining ground for most of the session. Investors are worried about the prospect of a tighter monetary policy in the US this year as the Federal Reserve prepares to quadruple its interest rates to curb the highest inflation in four decades.
Investors are waiting for the Federal Reserve meeting next week for more indications of how the US Federal Reserve plans to move. The 10-year US yield is currently at 1.79%, having climbed to a two-year high of over 1.9% on Wednesday. The yield started the year close to 1.5%.
At the same time, the minutes of the last meeting of the European Central Bank set were published yesterday showed that there are deep disagreements within the central bank over the outlook for inflation. Some ECB officials are now worried that even if the inflation rally proves to be temporary, it could cause a sharp acceleration in wage increases leading to a further rise in consumer prices.
On the board, the pan-European Stoxx 600 falls 1.95% to 473.93 points.
The German DAX lost 2.2% at 15,560.01 points, the French CAC-40 fell 2% to 7,053.47 points, while the British FTSE 100 fell 1.3% to 7,485.47 points.
In the periphery, the Italian FTSE MIB loses 1.8%, while the Spanish IBEX 35 falls by 1.3%.
Geopolitical concerns are also at the forefront, as the US-Russia talks on Ukraine remain deadlocked. The two countries’ foreign ministers also held new talks in Geneva today in a new effort to defuse the crisis, with the Russian side announcing that it expects written answers from Washington next week to the proposals it has already presented.
In business developments, mining giant Rio Tinto is down 2.7% following Serbia’s decision to revoke lithium exploration licenses citing environmental concerns.
Airbus’s title also fell 2.2% after the company announced that it had canceled a contract with Qatar Airways for 50 A321neo aircraft, intensifying its dispute with the Gulf carrier.
Siemens Energy plunged 15% after a downward revision of its forecast as its Siemens Gamesa wind farm warned of protracted supply chain issues.
I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.
