European Shares Tumble On Fed Worries

Business

European stocks fell from record highs on Thursday as investors digested the hawkish tone in the minutes from the latest U.S. Federal Reserve meeting.

The minutes from its December meeting indicated a faster timetable for raising interest rates this year amid a very tight job market and unabated inflation.

Covid-19 worries also weighed, with a French government spokesperson saying that a “supersonic” rise in Covid-19 infections will continue in the coming days.

In economic releases, Germany’s factory orders rebounded in November largely driven by foreign demand, data from Destatis showed.

New orders grew 3.7 percent month-on-month in November, reversing a strong decline of 5.8 percent in October. The pace of growth also exceeded the economists’ forecast of 2.1 percent.

Separate survey results from IHS Markit showed that Germany’s construction sector contracted at a slower pace in December.

The pan European Stoxx 600 fell 1.5 percent to 487.04 after ending flat with a positive bias.

The German DAX lost 1.4 percent, France’s CAC 40 index shed 1.6 percent and the U.K.’s FTSE dropped 0.9 percent.

B&M European Value Retail shares rose over 1 percent. The variety store company said that it expects to report an adjusted Ebitda for fiscal 2022 above current analysts’ consensus.

Catering and food services group Sodexo declined 1.4 percent after warning that the return to remote working this winter could affect its volumes.

Societe Generale gained more than 1 percent. The lender’s car leasing division ALD has agreed to buy rival LeasePlan for 4.9 billion euros ($5.5 billion).

Clothing company Next Plc gave up 1.6 percent despite raising its profit forecast for the fifth time.

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