European stock markets tumble sharply at opening on Thursday

European stock markets tumble sharply at opening on Thursday
© Belga

Major European stock markets have fell sharply at opening this morning, reacting negatively to an announcement by the American Federal Reserve (FED) declaring its intention to continue to fight against inflation and ruling out the possibility of cutting rates before 2024.

At 09:00, Euronext Paris opened 1.7% down. The Frankfurt Stock Exchange equally opened at 1.84% lower than at yesterday's closing. In early trading on the London Stock Exchange, the index dropped 0.92%.

US stock futures also fell sharply on the back of the announcement. The Dow Jones Industrial Average futures contracted by 0.36%, while S&P 500 and Nasdaq 100 futures fell by 0.56% and 0.79%, respectively.

Before the announcement by the FED, the major European indices had witnessed relative growth.

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The FED raised interest rates by 0.75 percentage points in the third move of its kind – a measure intended to tackle inflation. Rates are set to rise as high as 4.6% in 2030 in a bid to control runaway inflation but some investors now worry that this decision risks plunging national economies into recession.

The same fears are being felt in Belgium. The BEL20, a benchmark stock market index of Euronext Brussels, opened 1.64% lower this morning, dropping sharply from the day before.

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