European stocks fall; Bank of England meeting looms

By Peter Nurse – European stock markets fell on Thursday as another sharp hike by the Federal Reserve and weak Chinese economic data raised fears of a global recession, ahead of a Bank of England policy meeting.

At 04:35 ET (08:35 GMT), DAX futures in Germany traded down 0.9%, CAC 40 futures in France fell 1% and FTSE 100 futures in the UK United fell 0.8%.

The US central bank raised interest rates by 75 basis points on Wednesday, as widely expected, but sentiment was hit when President Jerome Powell said it was “very premature” to think about pausing the cycle. rise in rates and that the peak in rates would likely be higher than previously expected.

That disappointed investors who hoped the Fed boss would signal a slowing pace of his future rate hikes given recent signs of slowing growth in the world’s largest economy.

The Bank of England is also expected to hike 75 basis points later on Thursday to fight double-digit inflation. Such an increase would be its largest since 1989 and would put its base rate at 3.0%, the highest level since 2008.

Adding to concerns of a global slowdown, services activity in China contracted again in October, with the Caixin Services Purchasing Managers Index falling to 48.4 last month, the lowest since May. , down from 49.3 in September, as COVID-19 containment measures hit businesses and consumption. .

The 50 mark separates contraction from expansion on a monthly basis.

Economic data due Thursday includes the euro zone unemployment rate for September, as well as data on services activity in the UK for October.

In the corporate sector, BNP Paribas (EPA:BNPP) stock rose 0.7% after the euro zone’s biggest lender reported higher-than-expected third-quarter net profit, boosted by strong trading income.

ING (AS:INGA) shares rose 4.6% after the Dutch lender announced a new share buyback worth 1.5 billion euros ($1.47 billion) despite its quarterly pretax profit below expectations due to one-time charges.

Zalando (ETR:ZALG) stock fell 1.7% after Europe’s largest online fashion retailer said it expects revenue and operating profit to whole year hit the bottom of its target range.

Stellantis Inc (EPA:STLA) stock fell 1.9% after the world’s fourth-largest automaker flagged supply chain issues, particularly around logistics in Europe, which are weighing on future sales.

Oil prices fell on Thursday, falling from a three-week high, after weak Chinese economic data indicated slowing demand growth in the world’s biggest crude importer.

As of 4:35 a.m. ET, U.S. crude futures were trading down 1.6% at $88.58 a barrel, while the Brent contract was down 1.5% at $94.77.

Both contracts rallied on Wednesday to their highest levels since Oct. 10, with official data showing a bigger-than-expected drop in U.S. inventories of 3.115 million barrels in the week ended Oct. 28.

Additionally, gold futures fell 1.4% to $1,627.10 an ounce, while EUR/USD traded down 0.5% to 0.9765.

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