LONDON — European stocks fell sharply on Thursday as hawkish policy actions from central banks fueled worries of a possible recession.
European markets
The pan-European Stoxx 600 closed down by 2.5% provisionally, with tech shares plunging 4.7% to lead the losses. A higher interest rate environment is seen as negative for growth-oriented sectors like tech.
Global investors have been reacting to the Federal Reserve's decision to raise its benchmark funds rate to a range of 1.5% to 1.75% — the highest since just before the Covid pandemic began in March 2020 — in an effort to tame high inflation.
On Wall Street, stocks tumbled as traders worried the Fed's aggressive monetary policy stance would tip the economy into a recession.
Back in Europe, the Bank of England on Thursday implemented a fifth consecutive hike to interest rates as it looks to rein in soaring inflation.
The Monetary Policy Committee voted 6-3 to increase the Bank Rate by 25 basis points to 1.25%, with the three dissenting members voting for a 50 basis point hike to 1.5%.
The central bank, like others around the world, is looking to curb rampant inflation against a backdrop of slowing growth and a deteriorating currency.
The Swiss National Bank surprised markets on Thursday with a 50 basis point rate hike, its first increase since 2007, as its chairman warned of an increase to inflation and a risk of second-round effects.
In terms of individual share price movement in Europe, high-growth tech names like Zalando, Delivery Hero and Just Eat Takeaway.com were among the worst-performing stocks Thursday. Zalando plunged 12.4% to the bottom of the Stoxx 600.
At the top of the benchmark, U.K. used car dealership Inchcape rose 3.7% after issuing an upbeat trading update.