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European Bourses Track Lower Midday on Central Bank Actions

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Last updated: 09/22/2022 07:40:37

07:40 AM EDT, 09/22/2022 (MT Newswires) -- European bourses were tracking lower midday Thursday after the US Federal Reserve on Wednesday not only raised its key interest rate by 0.75% but indicated more rate increases are on the table.

The Bank of England Thursday raised UK interest rates by 50 basis points to 2.25%, joining other global central banks in tightening monetary policy to fight inflation.

After a rebound in the European economy in H1, economic indicators "point to a substantial slowdown in Euro area economic growth, with the economy expected to stagnate later in the year and in the first quarter of 2023," the European Central Bank said Thursday, in a report. The COVID-19 pandemic, the Russian invasion of Ukraine, and tighter central bank policy were cited for slowing economic growth.

The pan-continental Stoxx Europe 600 Index was off 0.7% mid-session.

The Stoxx Europe 600 Technology Index was off 2%, but the Stoxx 600 Banks Index gained 1.1%.

The Stoxx Europe 600 Oil and Gas Index was off 0.6%, and the Stoxx Europe Food and Beverage Index was up 0.4%.

The REITE, a European REIT index, fell 2.7%, while the Stoxx Europe 600 Insurance Index was off 0.1%.

On the national market indexes, Germany's DAX was off 1.2%, and the FTSE 100 in London was down 0.5%. The CAC 40 in Paris was off 1%, and Spain's IBEX 35 shed 0.7%.

Yields on benchmark 10-year German bonds were steady, near 1.88%.

Front-month North Sea Brent crude oil futures were up 0.8%, near $90.59 per barrel.

The Euro Stoxx 50 volatility index was up 0.5% to 27.29, still indicating moderately above-average volatility for European stock markets in the next 30 days. A reading above 20 indicates choppier markets ahead, while below 20 suggests calmer exchanges.

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