European shares fell on Wednesday after Federal Reserve Chair Jerome Powell signalled more aggressive rate hikes were in the offing, while the chemicals sector led declines on news of a Swiss antitrust probe into key fragrance companies.
The pan-European STOXX 600 index was down 0.2 % by 9:29 GMT, hitting its lowest level in a week.
European shares fell on Wednesday after Federal Reserve Chair Jerome Powell signalled more aggressive rate hikes were in the offing, while the chemicals sector led declines on news of a Swiss antitrust probe into key fragrance companies.
The pan-European STOXX 600 index was down 0.2 % by 9:29 GMT, hitting its lowest level in a week.
The index posted its steepest one-day fall in nearly two weeks on Tuesday after Powell said at a hearing before the Senate Banking Committee that the central bank might need to raise interest rates more than expected and was prepared to move in larger steps to temper inflation.
Powell's hawkish tone sent US two-year Treasury yields soaring to their highest since 2007, with markets, which until recently had pinned their hopes on 25-basis-point rate hikes, swiftly moving to price in 50 bps increase later this month.
"The global stock sell-off is continuing because investors have been jolted by a realisation that the work of the Federal Reserve in trying to tame inflation is far from over," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
Shares of Adidas fell nearly 2.3 % after the German sportswear maker said it planned to slash its 2022 dividend, warning of a hit from its split with rapper and fashion designer Kanye West.
Fragrance firm Symrise fell 4 % while Switzerland's Givaudan shed 3.6 %, dragging the European chemicals sector down 1.4 % to its lowest in nearly two months.
Switzerland's antitrust agency on Wednesday named the two firms among companies being investigated for forming an alleged fragrance cartel that is also the target of other European watchdogs as well as the United States.
Also weighing on the chemicals sector was Fuchs Petrolub, which fell 5 % on a downbeat 2023 profit forecast.
Rate-sensitive real estate stocks also fell 1.2 %.
Of the 238 companies in the STOXX 600 that have reported earnings to date in the fourth quarter, over half have topped analysts' estimates, according to Refinitiv data, helping the index gain 8 % so far this year.
Keeping Germany's DAX index afloat and limiting the STOXX 600's losses, Continental shares jumped 4.5 % after the auto supplier forecast higher margins this year.
German industrial production rose significantly more than expected in January.
among other stocks, Thales fell 3.3 % after the French defence electronics company projected 2023 free-cash-flow below consensus estimates.
&uuid=(email))