European Shares Set To Extend Losses As Risk Aversion Intensifies

European stocks are seen opening on a sluggish note Friday as market sentiment turned risk-averse amid worries over further interest-rate rises.

The Bank of England’s 50 basis point interest rate rise is expected to deepen the mortgage crisis.

ECB hawks are warning over sticky inflation, and it is not certain that rates could peak this summer.

Fed Chair reiterated the need for more rate rises, raising worries about a slowdown in consumer spending.

U.S. Treasury Secretary Janet Yellen said the chance of a U.S. recession has eased but still remains a risk.

Asian markets traded deep in the red and headed for their worst week in three months, with benchmark indexes in Hong Kong and Japan falling around 2 percent.

New data from Japan added to growth worries, with inflation elevated and private sector activity waning.

A spate of rate hikes from policymakers in England, Norway and Switzerland have pushed up global bond yields.

London copper prices were set for their first weekly decline in four weeks, oil headed for a weekly decline of more than three percent and gold was poised for its worst week in 4-1/2 months, as a stronger dollar made commodities less attractive for overseas investors.

U.S. stocks ended mostly higher overnight despite policy tightening fears from the U.S. to Norway and the U.K.

Tech stocks led advances as Fed Chair Jerome Powell wrapped up his congressional testimony, saying the central bank would move interest rates at a “careful pace” from here.

In economic releases, new data showed the number of jobless claims remained elevated last week.

The Dow ended flat with a negative bias, while the S&P 500 gained 0.4 percent and the tech-heavy Nasdaq Composite added 1 percent to snap three-day losing streaks.

European stocks closed lower on Thursday amid growth worries after the Bank of England raised rates by a bigger-than-expected half a percentage point to tackle persistent inflation.

The pan European STOXX 600 dropped half a percent. The German DAX slipped 0.2 percent, while France’s CAC 40 and the U.K.’s FTSE 100 both fell around 0.8 percent.

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