European stocks posted their biggest one-day drop in two weeks on Tuesday as investors weighed the prospects for a 50 percentage point hike in interest rates by the Federal Reserve following hawkish comments from central bank chairman Jerome Powell.
The pan-European STOXX 600 index closed down 0.77% at 460.60 points, with real estate and technology stocks taking a heavy hit.
The Fed may need to hike rates more than expected and is ready to take more tightening steps if upcoming data calls for tougher measures to control inflation, Powell said in a speech prepared for a hearing before the state Senate United.
The speech came ahead of monetary policy meetings of the Fed and the European Central Bank (ECB) later this month.
“Markets are reevaluating the interest rate outlook,” said Patrick Armstrong, chief investment officer at Plurimi Wealth.
“Economies around the world are proving quite resilient so far this year – while that’s good news for growth, it’s bad news for the inflationary pressures all central banks are facing.”
In LONDON, the Financial Times index fell by 0.13% to 7,919.48 points.
In FRANKFURT, the DAX index fell by 0.60% to 15,559.53 points.
In PARIS, the CAC-40 index lost 0.46% to 7,339.27 points.
In MILAN, the Ftse/Mib index lost 0.67% to 27,761.57 points.
In MADRID, the Ibex-35 index recorded a drop of 1.05%, to 9,411.10 points.
In LISBON, the PSI20 index lost 0.22% to 6,030.11 points.
Source: Terra
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