Croda shares led the index’s biggest losses after lukewarm earnings expectations.
Investors fear the US Federal Reserve will take a hawkish stance at its meeting next week as everyone expects the European Central Bank to continue to tighten monetary policy after repeated statements to that effect of the president of the bank.
Money markets now expect a 72.4% chance the Fed will keep interest rates unchanged at its June meeting, but a 52% chance it will resume July rate hikes of 25 points. base, according to data from the CME FedWatch Index.
For the ECB, traders see a 98% chance of a 25 basis point rate hike next week.
“Our view on the Fed is that it wants to stop…However, we expect the Fed to keep the door open for another hike in July,” said Mohit Kumar, strategist at Jefferies.
Kumar added: “The ECB is in a slightly different position as we don’t think it has yet to reach the territory it wants. We expect a rate hike in June followed by another in July and that would mark the end of the current rate hike cycle.”
price movements
As of 12:50 GMT, Europe’s Stoxx 600 index fell 0.30% to 459.34 points and heads into the end of the week without making significant gains.
Shares of Croda International fell 15.8%, topping losses on the STOXX 600, after the British chemicals company expected its annual pre-tax profit to beat expectations.
The European chemical sector index was down 1.9% and the sector was the biggest decliner among major European sectors this week, down around 3%.
On the gain side, the basic resources sector rose 0.8% and is on track for a weekly gain of 2%.
Norwegian mineral and renewable energy company Norsk Hydro also led the gains on the index, up 1.8%, after agreeing to buy land in Spain to build an aluminum recycling plant.
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