On Thursday, European shares declined as investors awaited the interest rate decision by the European Central Bank, whilst absorbing mixed signals from the US Federal Reserve. STOXX 600 index fell 0.8%, due to significant losses in the automotive shares which dropped 2.3%, whilst the oil and gas index surged 1.3%. Yesterday, the Fed lifted its benchmark rate 25 basis points (bps) to 5.00% – 5.25%, as expected, but eliminated its forecast for future rate hikes. Attention now turns to the ECB’s rate decision, with many expecting a quarter-point hike; however, the possibility of a larger hike is also being considered.
