European stocks opened on Thursday as investors around the world responded to the recent Fed meeting.
The Pan-European Stoxx 600 fell 1.2% at the start of trading, with basic resources and technology stocks falling 2%, causing losses as all sectors and major exchanges hit the red.
European markets followed their counterparts in Asia and the United States as traders digested the Federal Reserve’s promise to keep rates low for the next few years.
Members of the Federal Open Market Committee said the US overnight rate could stay anchored at zero through 2023 as the central bank tries to boost inflation. In a statement, the committee said, “As inflation remains below this longer-term target, the committee will seek to keep inflation moderately above 2% for some time so that inflation averages 2% over time.”
Usually, the prospect of lower interest rates over a longer period of time spurs purchases of stocks. However, this was not the case on Wednesday. The S&P 500 and Nasdaq both closed lower and the Dow finished its session highs well.
In Asia, the Bank of Japan kept monetary policy stable on Thursday. In its monetary policy statement, the BoJ said the Japanese economy had started to recover but remained in a “tough situation” due to the impact of the coronavirus pandemic domestically and abroad.
In Europe, investors will pay attention to policy guidelines from the Bank of England, which will also meet on Thursday. No changes in the bank’s monetary policy are expected today.
In terms of earnings, retailers Next and John Lewis Partnership will release interim results and Kier will release preliminary full year results.
– CNBC’s Eustance Huang and Fred Imbert contributed to this story.