European Shares Tumble On Hawkish Fed Hike
(RTTNews.com) - European stocks hit a two-year low on Thursday before recovering some lost ground after the U.S.Federal Reserve reiterated its commitment to tighten monetary policy, despite rising risks to growth.
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.
Investors were disappointed as the central bank's tone was not as dovish as some had hoped.
The Bank of England'sMonetary Policy Committee will announce its latest interest rate decision later today, with analysts expecting no significant change in policy.
Earlier in the day, the Bank of Japan maintained its ultra-loose monetary policy and reaffirmed its view on the economy, citing stagnant inflation and a looming consumption tax hike next year.
Sweden's central bank unexpectedly raised its key interest rate for the first time in over seven years. The Executive Board raised the repo rate by a quarter-basis points to -0.25 percent, which was the first hike since July 2011.
The pan-European Stoxx Europe 600 index was down 1.1 percent at 337.77 after hitting its lowest level since December 2016 earlier in the day.
The German DAX, France's CAC 40 index and the U.K.'sFTSE 100 were down between half a percent and 1.3 percent, with selling seen across the board.
The British pound was little changed after data showed that U.K. retail sales rose substantially more than expected in November due to Black Friday discounting.
Mining giant Anglo American, Antofagasta and Glencore dropped 2-3 percent after the United States said it would withdraw sanctions on Russian aluminium producer United Company Rusal.
Indivior rose over 1 percent in choppy trade, a day after it announced the launch of a cheaper version of its opioid addiction treatment drug.
Bourbon slumped 4.3 percent in Paris on news it is searching for new financial partners to ensure its development and the implementation of a strategic plan.
Capgemini lost 3.1 percent after announcing share capital reduction.
Renault declined 2.1 percent even as a Tokyo court rejected a request from prosecutors to extend the detention of Nissan Motor Co's ousted chairman, Carlos Ghosn.
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