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European stock markets drop at open


The German share price index DAX graph is pictured at the stock exchange in Frankfurt October 11, 2018. — Reuters pic
The German share price index DAX graph is pictured at the stock exchange in Frankfurt October 11, 2018. — Reuters pic

LONDON, Nov 23 — European equities slid in opening deals today, hit by unease over the region’s latest Covid restrictions alongside fears of higher US interest rates.

In initial trade, London’s benchmark FTSE 100 index reversed 0.2 per cent to 7,239.40 points.

In the eurozone, Frankfurt’s DAX shed 0.8 per cent to 15,986.81 points and the Paris CAC 40 lost 0.7 per cent to 7,055.17.

“Sentiment has turned negative towards European stocks in the last few days,” ThinkMarkets analyst Fawad Razaqzada told AFP.

“This is mainly because of concerns over the economic impact of the latest lockdowns as well the efficacy of the Covid vaccines. You would think that Covid cases would be much lower given the high rates of vaccinations.

“In addition, the Fed is expected to pursue a more hawkish approach towards monetary policy in the US, as authorities try to tame inflation.”

The three main indices followed Wall Street lower after a mixed session in Asia.

Asian bourses diverged and the dollar extended gains as investors bet on a quicker pace of monetary tightening by the Federal Reserve after Jerome Powell was nominated to serve a second term as boss — and said his goal was to tame the recent spike in inflation.

The widely-expected news sent Wall Street sliding from intra-day highs, with the Nasdaq losing more than one per cent due to tech firms’ susceptibility to higher interest rates.

“President Joe Biden favoured continuity over change in leadership by nominating Jerome Powell for his second term as chairman of the Federal Reserve,” noted AvaTrade analyst Naeem Aslam. — AFP

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