Business

European markets nervous as investors react to Fed, Ukraine decisions


LONDON – European stocks are expected to plunge at the open on Thursday as global markets react badly to the latest monetary policy decision from the US Federal Reserve.

UK FTSE The index is expected to open 147 points lower at 7,323, Germany’s DAX down 379 points at 15,071, of France CAC 40 down 175 points at 6,804 and in Italy FTSE MIB Down 675 points at 25,907, according to data from IG.

Global markets are reacting badly to The Federal Reserve’s indicator on Wednesday that it may soon raise interest rates for the first time in more than three years.

The Fed’s policymaking team said the Fed’s benchmark short-term borrowing rate is likely to increase by a quarter of a percent. It will be First increase since December 2018.

The statement after the meeting from the Federal Open Market Committee did not provide a specific time for when the increase would come, although signs suggest it could happen shortly after its meeting in March. The statement was made in response to inflation that is at its hottest in nearly 40 years.

US stocks rally for the first time on Wednesday even after the Federal Reserve indicated that a rate hike was imminent, overnight sentiment shifted.

US futures fell on Wednesday night; Dow futures erased earlier gains and fell 398 points, or 1.17%. Futures contracts on the S&P 500 and Nasdaq 100 fell 1.35% and 1.57%, respectively.

The Asia-Pacific market fell on a large scale on Thursday overnight. Japanese Nikkei 225 down 3.3% while Topix dropped 2.3%. In Korea, the benchmark Kospi down 3.13% and in Hong Kong, Hang Seng Index and the Hang Seng Tech index fell 2.56% and 4.61%, respectively. Shares in mainland China also fell.

Earnings in Europe came from Deutsche Bank on Thursday, as well as Unicredit, LVMH, SAP, Banco Sabadell, easyJet, Diageo and STMicroelectronics.

Renault will provide a strategic update on the Nissan/Mitsubishi alliance and on the data front, the German GfK consumer sentiment figures are due.

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– CNBC’s Jeff Cox, Tanaya Macheel and Abigail Ng contributed reporting to this market report.



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