European stocks tumbled on Thursday, on course for their biggest percentage drop in five weeks, as investors fled riskier assets including equities and commodities after the Federal Reserve signalled a slower pace of interest rate cuts next year.
The pan-European STOXX 600 index was down 1.2% by 0809 GMT, with all the major subsectors in the red.
US stocks plunged on Wednesday, with the major indexes posting their biggest daily decline in months, after the US central bank cut rates as expected, but Chair Jerome Powell said more reductions in borrowing costs now hinge on further progress in lowering stubbornly high inflation.
US and European government bond yields spiked in response, while prices of oil and base metals fell against a stronger dollar. Rate-sensitive technology stocks in Europe came under heavy selling pressure, down 1.9%, after megacap giants suffered big losses overnight on Wall Street.
Renault supports European shares ahead of Fed rate outcome
Traders are now awaiting the Bank of England’s rate decision at 1200 GMT, with markets widely expecting policymakers to keep rates on hold. The UK’s blue-chip FTSE 100 was down 1.2%, swept up in a broader market selloff.
SoftwareOne Holding jumped 10.1% after the Swiss technology firm announced a deal to buy Crayon Group Holding in a stock-and-cash offer that valued its Norwegian competitor at around $1.34 billion. Crayon’s shares dipped 1.6%.
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