Investing.com -- European stock markets traded sharply lower Thursday, tracking the selloff on Wall Street following the Federal Reserve’s more hawkish stance, while the Bank of England kept rates unchanged.
At 07:30 ET (12:30 GMT), Germany’s DAX fell 1%, France’s CAC 40 dropped 1.1%, and the UK’s FTSE 100 slipped 1.1%.
The major European indices have sold off Thursday, taking their lead from the sharp looses on Wall Street overnight after the Federal Reserve reduced its key interest rate by 25 basis points, as widely expected, but also pointed to only two rate cuts in 2025, down from the four previously forecast. This cautious outlook dampened investor sentiment globally.
European central bank decisions
There were also monetary policy decisions in Europe Thursday to digest.
The Bank of England kept interest rates unchanged, as expected, but three policymakers out of nine voted for a cut, more than had been expected.
Elsewhere, Norges Bank, Norway's central bank, held its policy interest rate unchanged at a 16-year high of 4.5% on Thursday, as expected, while the Riksbank, Sweden's central bank, decided to cut its policy rate by 25 basis points to 2.5%.
Oil prices dip amid stronger dollar
Crude oil prices fell on Thursday, pressured by a strengthening US dollar after the Fed meeting and US inventory data.
At 07:30 ET Brent futures declined 0.4% to $73.12 a barrel, while US crude futures (WTI) dropped 1.1% to $69.78 a barrel.
Traders feared that global economic growth will cool under relatively higher rates, limiting demand. The US dollar also soared, climbing to an over two-year high, which pressures the oil complex by making the commodity more expensive for international buyers.
Additionally, official data from the Energy Information Administration on Wednesday showed US crude stocks fell by 934,000 barrels in the week to Dec. 13, compared with expectations for a 1.6 million-barrel draw.
(Navamya Acharya contributed to this article.)