Investing.com - European stocks extended losses on Thursday, as investors turned their attention to a meeting of European Union leaders later in the day, while global equities remained under pressure after the Federal Reserve indicated that rates could rise as soon as next year.
During European afternoon trade, the EURO STOXX 50 retreated 0.72%, France’s CAC 40 dropped 0.73%, while Germany’s DAX 30 slid 0.63%.
EU heads were set to hold the first day of an economic summit in Brussels, with Ukraine expected to be one of the main topics of discussion.
At the conclusion of its two-day policy setting meeting on Wednesday, the Fed said it would reduce its monthly bond purchases by an additional $10 billion to $55 billion.
Fed Chair Janet Yellen indicated that the bank could begin to raise interest rates about six months after the bond-buying program winds up, which is expected to happen this fall.
The Fed statement also emphasized that economic conditions could mean that rates would remain on hold at record lows for some time, even after inflation and employment return to their longer-run trends.
The central bank also updated its forward guidance, discarding the 6.5% unemployment threshold for considering when to increase borrowing costs and said it will look at a wide range of information.
Financial stocks turned broadly lower, as French lenders BNP Paribas and Societe Generale tumbled 1.09% and 1.06%, while Germany''s Deutsche Bank declined 1.50%.
Earlier in the day, Credit Agricole said it is targeting at least €4 billion of annual net income by 2016, exceeding analysts’ estimates.
Among peripheral lenders, Italy''s Intesa Sanpaolo dropped 0.40% and Unicredit gained 0.42%, while Spanish banks Banco Santander and BBVA plummeted 1.17% and 2.18% respectively.
ING Group erased earlier gains, sliding 0.35% after the Dutch financial services company raised $1.18 billion with a sale of shares in its U.S. insurance unit as the parent company ended its majority stake.
In London, FTSE 100 retreated 1.02%, weighed by losses in GlaxoSmithKline, down 2.15%, as the company''s MAGE-A3 experimental cancer treatment failed to benefit lung cancer patients in a late-stage clinical trial.
Meanwhile, financial stocks remained mixed. Lloyds Banking lost 1.23% and Barclays plunged 2.16%, while HSBC Holdings edged up 0.07% and the Royal Bank of Scotland rose 0.27%.
In the mining sector, Rio Tinto and BHP Billiton dropped 1.15% and 0.67% respectively, while rivals Glencore Xstrata and Polymetal declined 0.68% and 0.98%.
In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.32% slide, S&P 500 futures signaled a 0.34% decline, while the Nasdaq 100 futures indicated a 0.36% loss.
Later in the day, the U.S. was to publish the weekly report on initial jobless claims, as well as data on existing home sales and manufacturing activity in the Philadelphia region.