After the Federal Reserve (the US Central Bank) hinted at the continuation of interest rate increases in the future, which dashed hopes for easing its hard-line stance to curb inflation, European markets hit their lowest levels on Thursday week.
The shares of the technology and real estate sectors, which are sensitive to changes in interest rates, declined 2. 3% and 2. 9%, respectively, contributing to the European Stoxx 600 index’s 0. 9% decline, the worst performance for a single day in four weeks.
Banks and insurance businesses have continued their gains, climbing by 0. 4% and 0. 2%, respectively, while the majority of the major sectors’ indices fell.
Yesterday, Wednesday, the Federal Reserve increased the benchmark interest rate by 75 basis points, marking the fourth consecutive increase, and stated that the “maximum level” of the rate may be higher than previously anticipated. However, Federal Reserve Chairman Jerome Powell indicated that future increases may come with a lower size.
This week, before the Federal Reserve decision was announced, the European stock markets surged three out of the four days, helped by better-than-expected profits. But since then, further evidence has emerged suggesting that the euro area is slowly but surely entering a recession.
With 5. 5% of Filter Filter Filters, shares of European tourism and entertainment companies lost 1.6%.
Europe’s stock market drops to its lowest point in a week.
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