Europe open: Shares follow US sell-off after Fed hikes rates

European shares all headed south in sympathy with the sell off on US markets after the Fed raised interest rates for the fourth time this year.

The pan-European Stoxx 600 was down 1.76% in early trade as all major European bourses slid by similar margins.

The Fed defied President Donald Trump and raised key lending rate rates by 0.25% to a range of 2.25 – 2.50%.

It said “some further” rate hikes would be necessary in the year ahead and expected two rises in 2019 instead of three forecast in September.

The Fed also cut its GDP growth estimate for this year by 0.1 percentage points to 3%, while the 2019 growth outlook was reduced by 0.2 percentage points to 2.3%.

US stocks recorded heavy losses after the announcement, falling to a 15 month low.

Citing an editorial in the Wall Street Journal calling for a pause in rises, Trump had piled on the pressure on Tuesday, warning the central bank to avoid making "yet another mistake".

Trade, home and car sales have all fallen as a result of Trump's international tariff wars as they are sensitive to higher interest rates.

In corporate news AstraZeneca was in the red even as the pharmaceuticals giant said two clinical trials of its Roxadustat drug showed positive results for the treatment of patients with anaemia in chronic kidney disease.

Oil giants BP and Shell both seeped lower as oil prices resumed their drop amid worries about oversupply, with West Texas Intermediate down 2.2% at $47.14 a barrel and Brent crude 1.6% lower at $56.35.