(Reuters) – European shares slumped nearly 1% on Thursday as heightened concerns about an economic slowdown and further rates hikes globally dented risk sentiment, while an escalating trade battle between China and the United States also weighed.
The pan-European STOXX 600 index dropped 0.8% by 0717 GMT, led by losses in the construction and materials index, which fell more than 1%.
Fed minutes on Wednesday showed that a united central bank agreed to hold rates steady at the June meeting to buy time and assess need for further rate hikes, even as the vast bulk expected they would eventually need to tighten policy further.
Meanwhile, U.S. Treasury Secretary Janet Yellen’s first trip to China will be on investors’ radar as she is likely to focus on recalibrating ties between the world’s two largest economies after Beijing’s new restrictions on exports of some metals sparked tensions.
German industrial orders rose significantly more than expected in May, due to large scale orders of ships, spacecraft and military vehicles.
Investors will closely monitor euro zone’s retail sales print due at 0900 GMT, with numbers expected to tick higher by 0.2% in May compared with a no-growth phase in the prior month.
Embracer (ST:EMBRACb), the top loser in the index, fell 0.8% after the gaming group raised 2 billion crowns ($182 million) in a share issue directed to institutional investors.
