European stocks slump; hawkish Fed minutes increase growth concerns
Investing.com — European stock markets fell sharply Thursday, with risk sentiment hit by the release of hawkish minutes of the Federal Reserve’s June meeting as well as weak economic signals.
At 03:20 ET (07:20 GMT), the DAX index in Germany traded 0.8% lower, the CAC 40 in France fell 1.4%, while the FTSE 100 in the U.K. traded 1% lower.
European stocks followed the negative lead on Wall Street, and Asia, after the minutes from the last Fed meeting showed that nearly all of its members supported more rate hikes in the coming months.
«Almost all participants noted that in their economic projections that they judged that additional increases in the target federal funds rate during 2023 would be appropriate,» the Fed minutes showed.
Additionally, there were some policymakers who were in favor of a rate hike at the June meeting, when the U.S. central bank paused its year-long tightening cycle, amid concerns about the strength in the labor market and «unacceptably high» elevated inflation.
Concerns that prolonged rate hikes will push the U.S. economy into recession have weighed heavily on most developed stock markets given the importance of the largest economy in the world as a global growth driver.
Back in Europe, economic worries are already growing after data released Wednesday showed that eurozone business activity slipped into contractionary territory last month.
The final Composite Purchasing Managers' Index, widely seen as a good gauge of overall economic health, slumped to 49.9 in June from May's 52.8.
There was some good news Thursday, as German factory orders rose 6.4% on the month in May, much better than expected and also an improvement on the fall of 0.4% the prior month, but this will only add to the
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