Investment accounts
Adult accounts
Child accounts
Choosing Fidelity
Choosing Fidelity
Why invest with us Current offers Fees and charges Open an account Transfer investments
Financial advice & support
Fidelity’s Services
Fidelity’s Services
Financial advice Retirement Wealth Management Investor Centre (London) Bereavement
Guidance and tools
Guidance and tools
Choosing investments Choosing accounts ISA calculator Retirement calculators
Share dealing
Choose your shares
Tools and information
Tools and information
Share prices and markets Chart and compare shares Stock market news Shareholder perks IPOs and placings
Pensions & retirement
Pensions, tax & tools
Saving for retirement
Approaching / In retirement
Approaching / In retirement
Speak to a specialist Creating a retirement plan Taking tax-free cash Pension drawdown Annuities Investing in retirement Investment Pathways
Europe midday: Powell's hawkish comments spark sell-off
(Sharecast News) - European stocks declined by over 1% on Friday hawkish comments from the chair of the Federal Reserve spooked investors who have convinced themselves that more rate hikes are off the table. Europe's Stoxx 600 index was down 1.1% at 442.95 - its steepest one-day decline since 19 October - with markets across the continent in the red.
Expectations have risen in recent weeks that central banks across Europe, the UK and US were done with monetary tightening for now, as inflation begins to ease and economic data weakens.
But Fed chair Jerome Powell said that further rate hikes would be necessary to sustainably bring inflation down to the 2% target. "If it becomes appropriate to tighten policy further, we will not hesitate to do so," he said.
"Yesterday's appearance from Federal Reserve chairman Powell helped bring the equity market resurgence to a grinding halt, with his apparent hawkish tone sending the 10-year yields higher and equities lower," said Joshua Mahony, chief market analyst at Scope Markets.
"With markets having been remarkably jittery in the wake of Powell's appearance, the market confidence seen of late clearly stands on relatively unstable presumptions. Nonetheless, the 'data dependent' theme that forms the basis of this less hawkish shift remains the key element to consider. With inflation expected to continue its downwards trajectory and economic strength coming into question, there is a strong chance that we see rates remain steady from here on in."
Economic news this side of the Atlantic was on the quiet side with UK GDP the only major release of the morning. The Office for National Statistics showed that UK GDP was unchanged in the three months to September, versus consensus expectations for a 0.1% contraction. For the month of September, GDP rose 0.2% on the month following 0.1% growth in August, which was revised down from 0.2%. Economists were expecting no growth.
Diageo drags drink stocks lower
UK-listed drinks giant Diageo saw shares plummet 15% after saying it expects to see a slowdown in growth in the first half due to a weaker performance in Latin America and the Caribbean.
Latin America and the Caribbean, one of its five key regions which accounts for 11% of group net sales values, is now expected to see an organic net sales decline of more than 20% in the second half compared with last year.
European drinks peers AB Inbev, Heineken, Carlsberg, Pernod Ricard, Royal Unibrew and Campari Group were all trading lower.
Shares in Richemont fell in Zurich, after the luxury group posted first-half profits below expectations and flagged weaker customer sentiment. The Swiss group, which owns Cartier, Van Cleef & Arpels, Chloe and IWC, among others, reported a 6% increase in sales in the six months to September end, to €10.2bn. Analysts had forecast interim sales of €10.34bn.
Housebuilder stocks were providing a further drag in London after Redrow warned that profits would be at the lower end of expectations due to weaker market conditions. Berkeley, Barratt Developments and Taylor Wimpey were all firmly lower.
Share this article
Related Sharecast Articles
Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.
Award-winning online share dealing
Search, compare and select from thousands of shares.
Expert insights into investing your money
Our team of experts explore the world of share dealing.
Policies and important information
Accessibility | Conflicts of interest statement | Consumer Duty Target Market | Consumer Duty Value Assessment Statement | Cookie policy | Diversity and Inclusion | Doing Business with Fidelity | Fidelity gender pay report | Investing in Fidelity funds | Legal information | Modern slavery | Mutual respect policy | Privacy statement | Remuneration policy | Security | Statutory and Regulatory disclosures | Whistleblowing policy
Please remember that past performance is not necessarily a guide to future performance, the performance of investments is not guaranteed, and the value of your investments can go down as well as up, so you may get back less than you invest. When investments have particular tax features, these will depend on your personal circumstances and tax rules may change in the future. This website does not contain any personal recommendations for a particular course of action, service or product. You should regularly review your investment objectives and choices and, if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser. Before opening an account, please read the ‘Doing Business with Fidelity’ document which incorporates our client terms. Prior to investing into a fund, please read the relevant key information document which contains important information about the fund.
This website is issued by Financial Administration Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) (FCA Register number 122169) and registered in England and Wales under company number 1629709 whose registered address is Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RP.