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European Shares Set To Extend Losses On Fed Worries

market trends2 100421 01sep22 lt

European shares look set to extend recent losses on Thursday as investors fret over aggressive Fed rate hikes.

Crude prices continued to slide, with Brent oil futures nearing $95 a barrel, on worries about the ailing state of the global economy.

Gold hit a six-week trough, the dollar gained ground and Treasury yields rose broadly after several Fed officials reiterated their support for further interest-rate hikes to combat inflation.

Closer home, French central bank chief Francois Villeroy de Galhau said on Wednesday the European Central Bank should show determination with interest-rate increases while also acting in an orderly and predictable way.

On the data front, German retail sales figures, Eurozone PMI final and unemployment rate, and U.K. PMI manufacturing final data will be released later in the day.

Across the Atlantic, reports on weekly jobless claims, manufacturing activity and construction spending are likely to attract attention, although trading activity may be somewhat subdued ahead of Friday's monthly jobs report.

A private sector survey showed earlier in the day that China's factory activity contracted for the first time in three months in August amid weakening demand.

Overnight, U.S. stocks came under pressure for the fourth straight session, as the ADP private payrolls report suggested a shift toward a more conservative pace of hiring in August and Cleveland Fed President Loretta Mester said policy makers should raise rates beyond 4 percent and deliver no rate cuts in 2023.

The Dow gave up 0.9 percent, the S&P 500 slipped 0.8 percent and the tech-heavy Composite index declined 0.6 percent.

European stocks closed lower on Wednesday, as Chinese factory activity data disappointed and a record Eurozone inflation reading fueled fears of continued and painful tightening measures.

The pan-European Stoxx Europe 600 lost 1.1 percent. The German DAX shed 1 percent, France's CAC 40 index fell 1.4 percent to extend its losing streak for the fifth straight session and the U.K.'s FTSE 100 declined 1.1 percent to close lower for the third straight session.

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