Europe open: Shares down sharply ahead of ECB meeting
European shares opened the session sharply lower on Thursday as investors awaited the European Central Bank's meeting later in the day.
The pan-European Stoxx 600 index fell 1% in early deals with all major regional bourses in the red. Traders are looking for any signs on future tightening from the ECB to counter spiralling inflation.
CMC Markets analyst Michael Hewson said that although no change in policy expected “ECB President Christine Lagarde will use her time to tee the markets up for a policy move next month”.
“The current situation presents a huge problem for the ECB, and its credibility, because if they signal a more aggressive tightening path, bond spreads in countries like Italy may start to rise to levels that are hugely problematic for debt funding purposes.”
Asian shares slipped overnight as new Covid restrictions were introduced in Shanghai.
In equity news, British American Tobacco rose after it said it was confident in delivering its financial targets irrespective of how long it takes to offload its Russian unit.
Shares in food and beverage ingredients provider Tate & Lyle rose as the company reported "strong top-line growth" in the year ended 31 March, with both revenue and profits growing on an adjusted basis.