Fundamental Comment

European shares slump more than 2% after Fed’s decision

European shares slump more than 2% after Fed’s decision

European shares fell more than two percent on Thursday’s trading, following the Fed's decision and pessimistic economic outlook, and with economic data forecasting.

As of 10:14 GMT, the Euro Stoxx 50 index slumped 2.17 percent to trade near 3,221.87 points.

German DAX 30 index descended by 2.18 percent and now settles near 12,256.56 points, while French CAC 40 reached 4,936.51 points, down 2.29 percent.

Britain’s FTSE 100 Index slumped to 6,190.62 points, bringing its slump today to about 2.18 percent.

The US central bank has kept interest rates unchanged, noting that it does not expect to raise them until 2022.

The Fed also predicted that the U.S. economy would contract 6.5 percent in 2020 before expanding by 5 percent in 2021.

Federal Reserve Chairman Jerome Powell said that moving the interest rate is not an option, noting that the coming months will be crucial for the economic situation.

The Fed is not considering raising US interest rates for the time being, Powell said at an online press conference following the monetary policy decision Wednesday.

Powell added that the Fed discussed the issue of controlling the yield curve on bonds, saying, "But whether that is useful will remain uncertain."

The Fed president noted that the surprise of the May jobs report shows how uncertain the future is.

At the beginning of the session, the travel sector fell by 5.3 percent, leading European market losses with the fact that all other sectors started trading within the red range.

On the other hand, the development of the corona virus remains a major concern for the market, with many States of the United States that have reopened yesterday reported mutations in cases.

Investors are looking closely ahead, with the eurogroup meeting today with the participation of the Eurogroup President, finance ministers from member states, the President of the European Central Bank and the economic and financial negotiator, to discuss a range of financial issues such as support mechanisms.

At press time, the EURUSD pair traded higher at 1.1383, while the highest level recorded during the session was at 1.1401.

Share Article