European stocks start September badly, amid growing concerns about rate hikes

European stocks start September badly, amid growing concerns about rate hikes

European stocks opened September lower, hitting seven-week lows on growing concerns about economic growth, aggressive interest rate hikes and record inflation.

* The pan-European STOXX 600 index lost 1.8%, with all sectors trading lower and posting its fifth consecutive day in the red.

* Euro zone manufacturing activity contracted for the second straight month in August, according to a survey that showed weak demand meant factories were unable to sell everything they made and were building stocks of finished goods at a record pace.

* The day before, a report showed that inflation in the bloc hit another record last month.

* Money markets peg an 80% chance the European Central Bank will raise rates by 75 basis points at its meeting next week, up from 50% prior to Wednesday’s data.

* “Given that the modus operandi of policy makers on both sides of the Atlantic clearly favors the hawkish stance, even at the expense of recession, it seems hard to imagine the ECB choosing not to take such a big step,” said Richard McGuire and Lyn Graham-Taylor, strategists at RaboBank.

* China-exposed miners slumped 3.8% and led European losses, amid a sharp decline in metals prices, while luxury stocks also came under pressure. LVMH, Kering and Hermes fell between 2.2% and 2.5%.

* Defensive stocks such as utilities and telecommunications posted the smallest declines.

Samuel Edwards
Samuel Edwards is the name you must have heard many times while reading reports related to Finance, that's what he is good at. From Major Investments to Stock Market Updates, he got 'em all. Be ready to blow your mind by the mind-blowing reports of Finance World from Samuel Edwards.