EUROPE Stocks trade lower after hawkish Fed message

European stock markets were trading lower around afternoon on Thursday, 15 December 2022, as risk sentiments weighed down amid concern that U.S. interest rates will remain higher for longer than expected after the Federal Reserve revised upward its rate outlook for the next year. Meanwhile, weaker than expected Chinese economic data also weighed on the mood.

At 12:15 GMT, the pan European Stoxx 600 index was down 1% to 438.33. The U.K.'s FTSE 100 index dropped 0.43% to 7,463.64. France's CAC 40 index fell 1.08% to 6,658.10. Germany's DAX index sank 1.13% to 14,296.79. Switzerland's Swiss Market index dropped 0.88% to 11,062.36.

 

Stocks met selling as investors fretted about future growth after the U.S. central bank raised its key short-term rate by 0.50 percentage points, as widely expected, marking its seventh hike this year, but also provided a hawkish message while expressing its determination to tame inflation, pointing to further hikes and keeping rates high for longer than earlier hoped.

China's economy lost more steam in November as factory output slowed and retail sales extended declines, hobbled by surging COVID-19 cases and widespread virus curbs. China's industrial output rose 2.2% in November from a year earlier, slowing significantly from the 5% growth seen in October, the National Bureau of Statistics (NBS) data showed on Thursday. The bureau also said that retail sales fell 5.9% amid broad-based weakness in the services sector, following a 0.5% dip in October. Fixed asset investment expanded 5.3% in the first 11 months of the year, versus slower from growth of 5.8% during January-October. The November jobless rate crept up to 5.6% from 5.5% in October, while the house price index was steady at an annual -1.6%.

Investors' eyes will now be trained on policy decisions from the European Central Bank and Bank of England later in the global day, as officials there also stood ready to hike rates again against the rising risks of fomenting recessions.

Crude oil prices fell Thursday, snapping a three-day rally as the hawkish tone from the Federal Reserve coupled with the weak economic data from China raised fears about demand growth in the coming months. Also weighing was official data from the Energy Information Administration showing that U.S. crude stocks rose by a hefty 10 million barrels last week, suggesting that near-term consumption in the world's largest economy remained subdued.

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