LONDON – European shares fell on Thursday ahead of the latest interest rate decision from the European Central Bank.
pan europe Stokes 600 It fell 0.7% in early trading, with core resources giving up 1.4% to lead losses as all sectors traded in negative territory except for oil and gas, which rose 0.6%.
In terms of individual stock price movement, a British supermarket chain Sainsbury’s It fell more than 5% in early trades to the bottom of the Stoxx 600, while the citizen sugar company Tate and Lyle It jumped more than 4% after the full-year earnings report.
European markets focus on the upcoming monetary policy meeting and the European Central Bank’s decision on Thursday. The central bank is expected to confirm its intention to raise interest rates next month. The move comes after inflation in the eurozone, which includes 19 countries Hit another record in May.
Investors will be watching European Central Bank President Christine Lagarde’s post-meeting press conference to gauge the strength of the bank’s action.
Asia Pacific Stocks It was mixed on Thursday, as investors awaited the market’s reaction to China’s trade data for May, which outperformed expectations. while, US stock futures fell In early market trade on Thursday after major averages ended the regular session lower and US Treasury yields rose.
US investors continue to look for signs of slowing economic growth ahead of the May CPI reading, which is due on Friday. The data is expected to come in slightly lower than the April figures and may indicate that inflation has peaked.
The negative start of trading on Thursday continues a general bearish trend for the markets as inflation and growth concerns continue to dampen investor sentiment.
“People are realizing that for sure, companies can start to pass on costs, so the price increases in general have been much higher than they were before, but their costs are going up and the concern is that costs will continue to go up, as they will then have more difficulty in continuing to raise these prices. I think that is one of the reasons why we are seeing such downward pressure on stocks.”
Randall Krossner
Professor of Economics at the University of Chicago
Randall Kruszner, a professor of economics at the University of Chicago and a former governor of the Federal Reserve System, told CNBC Thursday that inflation and rising hiring costs are starting to cause problems for companies, leading to a recent “re-pricing in stock markets.”
“People are realizing that for sure, companies can start to pass on costs, so the price increases in general have been much higher than they were before, but their costs are going up and the concern is that costs will continue to go up, as they will then have more difficulty in continuing to push those prices up. I think that’s one of the reasons we’ve seen such downward pressure on stocks,” Kreuzner told CNBC’s Squawk Box Europe.
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