Europe close: Stocks slip amid hawkish comments out of Fed and ECB
European shares surrendered early gains following hawkish comments from the US Federal Reserve overnight and out of the European Central Bank come Thursday.
The pan-European Stoxx 600 index was off 0.21% to 455.02 after falling 1.5% on Wednesday. The UK’s commodity-heavy FTSE 100 fell as shares in energy giant Shell fell after the company said it would write down up to $5bn as a result of its decision to exit Russia after its invasion of Ukraine, higher than previously disclosed.
US and Asia markets were weaker overnight after minutes of the Fed's March meeting showed officials last month "generally agreed" to cut up to $95bn a month from the central bank's asset holdings as another tool in the fight against surging inflation.
Investors were also digesting the minutes of the European Central Bank's last policy meeting which according to economists at ING revealed that inflation was now the main concern.
"Probably the most important message from the minutes is the paragraph that many members believed that the current high level of inflation and its persistence called for immediate further steps towards monetary policy normalisation," they explained.
"That's a clear signal that the announced policy normalisation at the March meeting might not be sufficient."
Elsewhere on the economic front, eurozone retail sales rose less than expected in February, according to figures released by Eurostat.
Retail sales increased by 0.3% on the month following a 0.2% rise in January, missing analysts' expectations for a 0.6% jump. The volume of retail trade rose 3.2% for automotive fuels, and 0.8% for non-food products. For food, drinks and tobacco, it fell 0.5%.
In equity news, shares in housebuilder Countryside Partnerships slumped as it said annual profit would fall after publishing a damning review of its own operations.
The company said it expanded too quickly and botched the acquisition of Westleigh in 2018. Project delays, poor workmanship and rising costs also affected the group at some sites.
Shares in Italian airport and roads manager Atlantia spiked on a news that Global Infrastructure Partners and Brookfield Infrastructure said they had met with the firm’s main shareholder and made a preliminary non-binding proposal for a possible acquisition of the infrastructure group.