On Thursday, Western Europe's leading stock market indicators closed sharply lower. Traders were assessing the decisions of the European Central Bank, the Bank of England and the U.S. Federal Reserve on the key interest rate.
The pan-European Stoxx 600 fell by 1.2% - to 43717 points.
The French CAC 40 fell by 3.09%, the German DAX lost 3.28% and the British FTSE 100 declined by 0.93%.
Leaders of growth and decline
The share price of Britain's largest bank HSBC dropped by 1.5%.
German motor vehicle manufacturer Volkswagen AG fell by 0.7%.
The share price of French carmaker Renault S.A. fell by 0.1%.
German motor vehicle manufacturer Mercedes-Benz Group AG fell by 0.3%.
The share price of Dutch car manufacturing corporation Stellantis NV fell by 1%.
Swedish clothing chain H&M plummeted 4.1%. At the same time, the company said sales for the quarter ended Nov. 30 increased by 10% on year.
The share price of Swedish medical equipment manufacturer Getinge AB dropped by 8%.
German digital automotive platform Auto1 Group SE also sank by 8%.
Polish video games developer CD Projekt S.A. plummeted 7.4%.
The U.K. electrical retailer Currys dropped 4.8% after full year profit guidance lowered.
The share price of British American Tobacco, a maker of cigarettes, tobacco and nicotine products, rose 0.6% on news that the company will close its plant in Switzerland in 2023.
Market sentiment
On Thursday, European traders analyzed the results of meetings of the world central banks. Thus, the ECB raised the main interest rate by 50 basis points to 2.5%. In addition, representatives of the ECB said they believe further rate hikes are necessary in order to achieve the inflation target of 2%.
Recall that during the ECB's October meeting, the central bank raised all three key interest rates by 75 basis points. At the same time, the indicator of the base interest rate on loans was increased to 2%, deposit rates up to 1.5%, and rates on margin loans up to 2.25%.
On Thursday, the BoE also increased its base rate by 50 basis points, to 3.5% from 3%. In addition, representatives of the central bank said it intends to pursue a tactic of further rate hikes to combat record levels of inflation.
As part of its November meeting, the BoE raised the rate by 75 basis points, the highest hike since 1989.
On Wednesday evening, the Fed raised its interest rate by 50 basis points to 4.25%-4.5%. At the same time, the rate reached its highest level since 2007. In a comment on the results of the December meeting, Fed Chairman Jerome Powell said that the US central bank will stay on course to tighten monetary policy until inflation returns to the 2% target level.
Recall that the central bank raised interest rates by 75 basis points in October for the fourth consecutive meeting.
On Thursday, European investors also analyzed new data for the countries of the region. So, according to final data from France's Insee National Statistics Office, the country's annual inflation rate in November remained at October's level of 6.2%, while monthly inflation fell to 0.3% from 1% in October. At the same time the increase in prices for food made 12.1%, for energy - 18.4%, for industrial goods - 4.4% and for services - 3%.
No change to French business sentiment as we get into the final month of the year, staying just slightly above its long-term average of 100. At the same time, analysts predicted a drop in the indicator to 100 points.
According to the European Association of Automobile Manufacturers (ACEA), the EU new passenger car market reported another strong growth at 16.3%, the fourth in a row this year, to 829,527 units sold in November 2022. Last month's volume of sales still remains much lower than the pre-pandemic level.
Next Friday, Eurostat will publish its final estimate of annual inflation in the euro area at the end of last month. According to experts' preliminary forecasts, consumer price growth fell to 10% in November from October's 10.6%.
Trading results the day before
On Wednesday, the leading stock exchange indicators of Western Europe closed the session lower after rising a day earlier.
The Stoxx Europe 600 fell by 0.02% to 442.51 points.
France's CAC 40 was down 0.21%, Germany's DAX lost 0.26% and Britain's FTSE 100 was down 0.09%.
On Wednesday, European investors were analyzing fresh statistics on the countries of the region. According to the UK Office of National Statistics (ONS), the inflation rate rose 10.7% in
November from a year earlier, bringing the rate of inflation down slightly from 11.1% in October. In this case, experts on average expected consumer prices at 10.9%. in November.
According to analysts, the slowdown in consumer price growth in England was due to cooling fuel prices (down to 17.2% from October's 22.2%). Inflation for restaurants and hotels was 10.2% in November, up from 9.6% in October. Still, the price of food and non-alcoholic drinks went up by 16.5%, the fastest pace since 1977.
In Spain, headline inflation slowed for a fourth month in a row, falling to 6.7% in November from 7.3% in October. Experts on average forecasted a fall in consumer price growth to 6.6%.
