LONDON: European stocks tumbled on Thursday following signals that the European Central Bank would likely hike rates this year, while weak results from Facebook owner Meta added to pressure on global technology stocks.

The pan-European STOXX 600 closed down 1.8% with tech stocks the worst performers, losing 3.5%.

The sector was pressured by a spike in bond yields after ECB head Christine Lagarde chose not to repeat her past comment that a 2022 rate hike was unlikely, in the face of higher inflation.

Jitters over policy tightening this year saw European technology stocks plummet 12% in January, their worst month since the peak of the 2008 financial crisis.

The prospect of rising interest rates dents the value of future tech earnings. The Bank of England earlier today also raised rates.

Adding to pressure on global technology stocks, Facebook owner Meta lost nearly a quarter of its value after posting much weaker results. “Today’s ECB meeting marks an important hawkish shift. For some, it even looks like the late revenge of the hawks,” wrote Carsten Brzeski, global head of macro at ING.

“Assuming that energy prices do not dive over the next four weeks, we expect the ECB to speed up the reduction of net asset purchases and to bring them to an end in September, allowing the ECB to hike the deposit rate at least once before the end of the year.”

Euro zone inflation rose to a record high in January, driven chiefly by increases in fuel prices.

European banks were the best performers on Thursday, while telecom stocks were supported by Deutsche Telekom , which rose 2.6% on strong results from its US unit T-Mobile.

A positive fourth-quarter earnings season has offered some solace to the STOXX 600, after a dismal performance in January.

Shell rose 1.4% as the company boosted its dividend and share repurchases after quarterly profits hit their highest in eight years, fuelled by higher oil and gas prices and strong gas trading performance.

Swiss drugmaker Roche fell 2.4% after saying sales growth would slow this year as it braces for less demand for its COVID-19 medicines and diagnostics.

Publicis Groupe, the world’s third-biggest advertising agency, added 0.5% after forecasting organic sales growth of 4% to 5% this year, and as its 2021 earnings exceeded pre-pandemic levels to reach new records.

Sweden’s Skanska firmed 4.8% after it posted quarterly profit above market expectations, and said market activity in construction had picked up gradually during the year.