European stocks fell on Thursday (03/11/2022) as another big hike by the Federal Reserve and weak Chinese economic data raised fears of a global recession, ahead of a policy meeting by the Bank of England.

At 04:35 ET (08:35 GMT), Germany's DAX futures were trading 0.9% lower, France's CAC 40 futures were down 1% and the U.K.'s FTSE 100 futures were down 0.8%.

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European Stocks Today

The US central bank raised interest rates by 75 basis points on Wednesday, as widely expected, but sentiment was hit when Chairman Jerome Powell said it was “very premature” to think about stopping the rate-hiking cycle and that the peak in rates would likely be higher than previously thought.

That disappointed investors who had been hoping the Fed boss would signal a slowdown in the pace of future rate hikes given recent signs of slowing growth in the world’s largest economy.

The Bank of England is also expected to raise its benchmark interest rate by 75 basis points later Thursday to combat double-digit inflation. Such an increase would be the biggest since 1989, and would leave its base interest rate at 3.0%, the highest level since 2008.

Adding to concerns of a global slowdown, China’s services activity contracted again in October, with the Caixin services purchasing managers’ index falling to 48.4 last month, the lowest since May, from 49.3 in September, as COVID-19 containment measures hit businesses and consumption. The 50 mark separates contraction from expansion on a monthly basis.

Economic data due Thursday includes the euro zone unemployment rate for September, as well as UK services activity data for October.

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European Stock Analysis


 

In corporate Europe today, BNP Paribas (EPA:BNPP) shares rose 0.7% after the euro zone's largest lender posted higher-than-expected net profit in the third quarter, boosted by strong trading revenue.

ING (AS:INGA) shares rose 4.6% after the Dutch lender announced a 1.5 billion euro ($1.47 billion) new share buyback even though its quarterly pretax profit fell short of expectations due to one-off charges.

Zalando (ETR:ZALG) shares fell 1.7% after Europe's largest online fashion retailer said it expects full-year revenue and operating profit to hit the lower end of its target range.

Stellantis (EPA:STLA) shares fell 1.9% after the world’s fourth-largest automaker said supply chain issues, particularly around logistics in Europe, were dragging on future sales.

Oil prices fell on Thursday, retreating from a three-week high, after weak Chinese economic data pointed to slowing demand growth in the world’s largest crude importer.

At 4:35 a.m. ET, U.S. crude futures were trading 1.6% lower at $88.58 a barrel, while Brent futures were down 1.5% at $94.77.

Both contracts had gained on Wednesday, rising to their highest since Oct. 10, as official data showed a larger-than-expected drawdown in U.S. inventories of 3.115 million barrels in the week to Oct. 28.

Additionally, gold futures fell 1.4% to $1,627.10/oz, while EUR/USD traded 0.5% lower at 0.9765.

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