Markets

European markets close lower after Fed flags uncertainty of U.S. recovery

Key Points
  • Minutes released Wednesday from the FOMC's last monetary policy meeting showed that central bank policymakers see the U.S. recovery from the coronavirus-induced downturn as "highly uncertain."
  • Geopolitical tensions remain on the agenda after U.S. Secretary of State Mike Pompeo warned Russia and China not to contravene the reimposition of UN sanctions on Iran

European stocks closed lower on Thursday after the U.S. Federal Reserve struck a pessimistic tone over the country's economic recovery prospects.

The pan-European Stoxx 600 closed almost 1.1% lower, with basic resources shedding 2.9% to lead losses as all sectors and major bourses slid into negative territory.

Minutes released Wednesday from the Federal Open Market Committee's last monetary policy meeting showed that central bank policymakers see the U.S. recovery from the coronavirus-induced downturn as "highly uncertain."

Markets seemingly shrugged Thursday morning after the Chinese commerce ministry announced that Washington and Beijing will be back around the negotiating table in the coming days. Scheduled talks last weekend had been postponed.

Geopolitical tensions remain on the agenda after U.S. Secretary of State Mike Pompeo warned Russia and China not to contravene the reimposition of UN sanctions on Iran. Pompeo has been instructed by President Donald Trump to trigger the measures at the UN Security Council in New York on Thursday.

Meanwhile, White House economic advisor Larry Kudlow told CNBC on Wednesday that Trump wants to prevent China from accessing some of the proceeds from the sale of TikTok's U.S. operations. Kudlow admitted that would be "unusual" for the U.S. Treasury to receive some form of payment.

In Europe, protesters continued to gather in Minsk on Wednesday evening in defiance of an order from Belarusian President Alexander Lukashenko for the streets to be cleared by police forces. Demonstrations against the president have now continued for a week and a half since the country's election, which the European Union has dismissed as illegitimate.

In terms of individual share price action, Swedish investment firm EQT fell 14.5% to the bottom of the Stoxx 600 after its first-half results.

Belgian pharma company Galapagos was among the top performers on Thursday, closing up around 3% for the session.