On Thursday, European stocks fell as concerns about the condition of inflation in the euro zone and tighter monetary policy to control it were raised in minutes from the European Central Bank’s most recent meeting. Falling retail sales also increased worries about an impending economic slowdown.
After making early session gains, the pan-European Stoxx 600 index reversed course and dropped 0.6%, posting losses for the second straight session.
On expectations that the US Federal Reserve and other central banks would adopt a less aggressive stance, European markets experienced a boost at the start of the week.
However, the minutes of the September 7–8 ECB meeting revealed that policymakers are concerned that inflation may persist for an extended period of time at very high levels, necessitating significant monetary tightening, even if it slows growth.
At its most recent meeting, the European Central Bank increased interest rates by 75 basis points and signalled that there would be additional hikes even as the countries of the bloc struggle with rising prices and a cost-of-living problem.
The mining and utilities indexes fell by about two percent, leading the majority of the sub-sectors on the Stoxx index into negative territory.
The FTSE 100 index lost its early session gains and dropped 0.8%, while the index of mid-sized companies with a local market emphasis increased 0.4%.
Shares of Shell dropped 2.8% after the oil major announced that weak natural gas trading revenues and sharply declining refining margins would result in lower third-quarter earnings.
European equities decline on inflation worries
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