European stock markets were lower Thursday as investors digested the latest interest rate hikes by the U.S. Federal Reserve and the Bank of England.
The pan-European Stoxx 600 was down 0.6% in afternoon trade, slightly trimming losses after the U.K. central bank announced its widely-expected 25 basis point increase. The blue chip index had been trading lower through the morning.
The banking sector continued to lead losses, down 1.7%. Banks rallied on Tuesday and through much of Wednesday’s session before closing 0.2% lower.
Construction stocks were down 1.4% and financial services dropped 0.9%, though tech stocks bucked the trend to climb 0.6%.
Markets had fully priced in the BOE decision after U.K. inflation came in hotter than expected on Wednesday.
The U.S. central bank hiked rates by another 25 basis points on Wednesday and expressed caution about the recent banking crisis. It also indicated that hikes are nearing an end.
Asia-Pacific markets closed mixed on Thursday after Wall Street’s negative reaction to the Fed’s move.
A sharp drop in U.S. bank stocks also weighed on the market, as did comments from Yellen, who said the U.S. is not currently working on “blanket insurance” for bank deposits, in comments to the U.S. Senate appropriations subcommittee.
The Swiss National Bank on Thursday morning announced it would raise its benchmark interest rate by 50 basis points, taking it to 1.5%.
U.S. stock futures were higher overnight.
This article was originally published by CNBC.
