European Markets Dropped In Reaction To Fed Statement
(RTTNews.com) - The European markets ended Thursday's session solidly in negative territory, as investors had their first opportunity to react to yesterday's policy decision from the Federal Reserve.
The Fed raised interest rates by a quarter point, as widely expected, and indicated it still expects to hike rates twice in the first half of next year. The central bank's tone was not as dovish as some investors had hoped.
Meanwhile, Bank of England policymakers unanimously left the key interest rate and asset purchase targets unchanged on Thursday, as expected. The nine-member Monetary Policy Committee held its key interest rate unchanged at 0.75 percent in line with economists' expectations.
Brexit uncertainties have intensified considerably since the previous policy session and they are weighing on UK financial markets and on the near-term growth outlook, the bank said.
The bank expects inflation to fall below 2 percent in coming months due to lower oil prices.
The pan-European Stoxx Europe 600 index weakened 1.40 percent. The Euro Stoxx 50 index of eurozone bluechip stocks decreased 1.68 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 1.18 percent.
The DAX of Germany dropped 1.78 percent and the CAC of France fell 1.44 percent. The FTSE 100 of the U.K. declined 0.80 percent and the SMI of Switzerland finished lower by 1.47 percent.
In Paris, Bourbon sank 5.55 percent on news it is searching for new financial partners to ensure its development and the implementation of a strategic plan.
Capgemini lost 4.26 percent after announcing share capital reduction.
Publicis Groupe dropped 1.72 percent. The company said it is entering into exclusive negotiations with the founding shareholders of Soft Computing, data marketing firm in France, to acquire a controlling block representing 82.99 percent of the share capital at a price of 25 euro per share.
Renault declined 0.13 percent even as a Tokyo court rejected a request from prosecutors to extend the detention of Nissan Motor Co's ousted chairman, Carlos Ghosn.
In London, Indivior rose 4.15 percent in choppy trade, a day after it announced the launch of a cheaper version of its opioid addiction treatment drug.
Eurozone's current account surplus increased in October after declining in the previous month, but was lower than the same month last year. The current account surplus rose to EUR 23 billion from EUR 18 billion in September, figures from the European Central Bank showed on Thursday. In October 2017, the surplus was EUR 35 billion.
UK retail sales rose for the first time in three months in November to surpass economists' expectations, thanks to Black Friday promotions and record online spending, while the long term trend was that of a slowdown, amid the persistent Brexit uncertainties.
Data from the Office for National Statistics showed on Thursday that the volume of retail sales including automotive fuel rose 1.4 percent from October, which was much faster than the 0.3 percent growth economists had predicted.
After reporting a notable decrease in first-time claims for U.S. unemployment benefits in the previous week, the Labor Department released a report on Thursday showing initial jobless claims rebounded in the week ended December 15th.
The report said initial jobless claims rose to 214,000, an increase of 8,000 from the previous week's unrevised level of 206,000. Economists had expected jobless claims to climb to 216,000.
Manufacturing activity in the Philadelphia region continued to grow but remained subdued in the month of December, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday. The report said the diffusion index for current general activity dropped to 9.4 in December after tumbling to 12.9 in November.
While a positive reading still indicates growth in regional manufacturing activity, economists had expected the index to rise to 15.0.
A report released by the Conference Board on Thursday showed a modest increase by leading U.S. economic indicators in the month of November. The Conference Board said its leading economic index rose by 0.2 percent in November after falling by a revised 0.3 percent in October.
Economists had expected the index to come in unchanged compared to the 0.1 percent uptick originally reported for the previous month.
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