European markets stumbled on Thursday as an early boost from Nvidia’s bumper earnings report and falling bond yields faded through the session.
After three consecutive positive sessions and a strong open, the pan-European Stoxx 600 index closed 0.4% lower. Financial services added 0.5% while tech stocks retreated from a recent rally to fall 2.3%.
The European blue chip index gained Wednesday even as euro zone purchasing managers’ index figures came in well below expectations and services activity slid into decline.
U.S. stocks were little-changed in early trade.
Investors are also awaiting comments from U.S. Federal Reserve Chairman Jerome Powell on Friday at the conclusion of the central bank’s symposium in Jackson Hole, Wyoming, which Wall Street hopes will offer some insight into the likely path of interest rates.
Europe stocks close lower
Europe’s Stoxx 600 closed 0.37% lower Thursday as tech stocks dropped 2.3% and August gloom returned after three positive sessions.
The benchmark index has fallen 4.17% in the month to date, according to Eikon data.
Lira boosted by Turkey rate hike
Turkey’s currency rallied after the central bank enacted a bigger-than-expected interest rate hike.
The lira has marked several fresh record lows over the last year as its central bank has broken with economic orthodoxy to lower rates amid soaring inflation, before suddenly pivoting to hikes in June.
Thursday’s 750 basis point hike takes its main policy rate to 25%.
Stocks on the Istanbul exchange were 0.8% lower, though Turkish banks rocketed 9.23% higher.
U.S. stocks open mixed Thursday
Turkey’s central bank on Thursday hiked interest rates by more than expected to 25%, signaling it was willing to follow through on a new commitment to damp inflation through monetary policy.
The main policy rate was previously at 17.5%. Economists polled by Reuters expected a rise to 20%.
In a Thursday statement, the Turkish central bank committee said it “decided to continue the monetary tightening process in order to establish the disinflation course as soon as possible, to anchor inflation expectations, and to control the deterioration in pricing behavior.”
ALK-Abello shares were up more than 8% by early afternoon to lead the Stoxx 600 after the Danish allergy treatment company beat second-quarter earnings expectations and almost doubled year-on-year operating profits.
Opening momentum fades in Europe
By early afternoon in London, the pan-European Stoxx 600 index had all but given back opening gains of 0.9%, hovering just 0.1% above the flatline. Financial services added 0.8% while mining stocks fell 0.7%.
Source : CNBC