European Stocks Drop On Prospect Of U.S. Rate Hike
Stocks across Europe fell on Thursday, following other global markets down on the prospect that a U.S. interest-rate increase may arrive sooner than anticipated.
The Europe Stoxx 600 index fell 0.6% to 325.70, on track for a second-straight decline, as oil securities paced the pullback. Total SA (TOT) eased 1.3%, and BP PLC (BP) gave up 1.1%.
Federal Reserve Chairwoman Janet Yellen said Wednesday that rate hikes could happen after "about six months" from the time the central bank finishes winding down bond purchases. Her comment came as she answered questions in her first news conference as the head of the Fed.
For European equities, "risk-off is the name of the game today," as traders were "nervous" after Yellen's "hawkish comments", said Naeem Aslam, chief market analyst at Ava Trade, in emailed comments
"It appears that her dashboard might be giving her green signals and making her confident that the bank perhaps could increase the short-term interest rate in a year's time," he said.
After Yellen spoke, traders in federal funds futures on Tuesday moved up their bets on rate hikes by two meetings, to April 2015.
Stocks in Asia fell overnight, with Japan's Nikkei Stock Average settling 1.7% lower. On Thursday, U.S. stock futures slipped premarket, building on prior-day losses, when the S&P 500 index (SPX) ended 0.6% lower and the Dow Jones Industrial Average (DJI) dropped more than 100 points, or 0.7%.
Among European indexes, Germany's DAX 30 index fell 0.5% to 9,229.36, France's CAC 40 index fell 0.8% to 4,274.20, and the U.K.'s FTSE 100 index declined 0.7% to 6,526.11.
Among individual issues, GlaxoSmithKline PLC (GSK) fell 1.9% in London trade after the company said a treatment for patients with non-small-cell lung cancer didn't meet its goals in a late-stage clinical trial.
Meanwhile, betting firms extended declines from Wednesday when the U.K. government said it would raise taxes on betting terminals. Ladbrokes PLC shed 4.1% and William Hill PLC fell 2.6%.
In Frankfurt, stock in Deutsche Boerse AG fell 0.9% after J.P. Morgan Cazenove cut the company to underweight from neutral.