(Reuters) – European stocks declined on Tuesday as investors grew wary ahead of a speech by Federal Reserve Chair Jerome Powell, after two U.S. central bankers expressed hawkish sentiment overnight.
At 08:11 GMT, the pan-European STOXX 600 fell 0.7%. During the previous trading session, the index reached its highest level in eight months.
After Fed members stated that the Fed policy rate, which is currently between 4.25% and 4.5%, would need to climb to 5%-5.25% in order to rein in inflation, markets were keenly interested in Powell’s address later in the day.
The STOXX 600 was weighed down by rate-sensitive technology firms falling 1.0% and pharmaceutical giants Novo Nordisk (NYSE:NVO) and Novartis AG falling more than 1.5% each.
Miners fell by 1% because copper prices were low and investors were worried about demand risks because they thought the U.S. would raise interest rates again.
Since the beginning of this year, Europe’s STOXX 600 index has gone up 5.5%. This comes after a rough year in 2022. Investors are hoping that the euro zone will have a milder recession than expected and that central banks will stop tightening money so much.
The export-heavy FTSE 100 index declined 0.4%.
Monday, the government said that the current level of energy subsidies for businesses is “unsustainably expensive.” This led Britain to say that it plans to cut these subsidies by almost 85% for the next fiscal year.
