European stocks lower on hawkish Fed minutes, China's woes; BAE slumps
Investing.com — European stock markets traded lower Thursday on growing worries around China’s stuttering economy and the potential for higher U.S. interest rates.
At 03:50 ET (07:50 GMT), the DAX index in Germany traded 0.6% lower, the CAC 40 in France dropped 0.6%, while the FTSE 100 in the U.K. traded 0.5% lower.
The minutes of the Fed’s July meeting showed a number of officials still saw the need for more interest rate hikes to combat still elevated inflation levels, potentially weighing on economic activity in the world’s largest economy, a major global growth driver.
“Most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy,” according to minutes published Wednesday in Washington.
Additionally, the July Fed meeting came before a raft of U.S. data that underscored the resilient economy.
Adding to the negative sentiment was the news that rating agency Fitch Ratings may consider rethinking China’s A+ sovereign credit rating, especially if corporate debt conditions worsen and the government expands its balance sheet to support the companies.
This comes amid fresh concerns about the country’s property sector, which have contributed towards Chinese economic growth slowing sharply in the second quarter of 2023.
Back in Europe, the economic outlook is downcast, as evidenced by Dutch government policy adviser CPB predicting economic growth in the Netherlands will be much slower than earlier expected this year, as a recession in the first half of 2023 ended a strong post-COVID-19 boom.
Eurozone gross domestic product rose 0.3% in the second quarter, the EU's statistics agency said Wednesday, but underlying growth was probably weaker, as the data was
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