European stocks are inactive ahead of FOMC meeting

Budrigannews.com – After two U.S. central bank policymakers issued hawkish remarks overnight, investors turned cautious ahead of Federal Reserve Chair Jerome Powell’s speech, causing European shares to fall on Tuesday.

By 08:11 GMT, the pan-European lost 0.7 percent. In the previous session, the index had reached its highest point in eight months.

Investors paid attention to Powell’s speech later that day after Fed officials said they expected the Fed policy rate, which is currently 4.25 percent to 4.5 percent, to need to rise to 5 percent to 5.25 percent in order to control inflation.

Technology stocks that are sensitive to rates fell 1.0%, while pharmaceutical giant Novo Nordisk (NYSE:) and Novartis AG each lost more than 1.5%, which hurt the STOXX 600.

Miners lost 1% in tandem with falling prices as investors evaluated demand risks in anticipation of additional U.S. rate hikes.

Europe’s STOXX 600 has gained 5.5 percent since the beginning of the year on rising expectations that the euro zone will experience a milder than anticipated recession and that central banks will ease their aggressive monetary policy tightening after a rough 2022.

More UK expects limited retail sales growth in 2023

The export-heavy UK economy lost 0.4%.

After describing the current level of support as “unsustainablely expensive,” the government of Britain announced plans on Monday to reduce energy subsidies for businesses by approximately 85 percent for the upcoming fiscal year.