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European equities react to Fed, BOJ, BOE meetings

European equities opened lower on Thursday as investors around the world react to the latest US Federal Reserve meeting.

The pan-European Stoxx 600 fell 1.2% at the start of trading, core assets and tech stocks fell 2%, leading to losses as all major sectors and exchanges slid into the red.

European markets are following their counterparts in Asia and the US to the downside as traders digested the Federal Reserve’s commitment to keep rates low over the next few years.

Federal Open Market Committee members indicated that the US overnight rate could remain pegged at the zero limit until 2023 as the central bank tries to stimulate inflation. In a statement, the committee said: “With inflation steadily flowing below this long-term target, the Committee will aim to achieve inflation moderately above 2% for some time, so that inflation reaches an average of 2% over time “.

Typically, the outlook for lower rates over an extended period of time stimulates stock buying. However, this was not the case on Wednesday. The S&P 500 and Nasdaq both closed lower and the Dow closed its session high well.

Meanwhile 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 dire straits”

; due to the impact of the coronavirus pandemic at home and abroad.

In Europe, investors will be on the lookout for any political guidance from the Bank of England which will also meet on Thursday. No changes to the bank’s monetary position are planned for today.

On the earnings front, resellers Next and John Lewis Partnership will publish interim results and Kier will publish preliminary results for the full year.

– CNBC’s Eustance Huang and Fred Imbert helped bring this story back.

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