European markets are responding to divestments in the United States

LONDON – European equities are expected to open sharply lower on Thursday after losses on the state side on Wednesday, with the Dow Jones Industrial Average recording its first fall in 2022.

The UK FTSE index is seen to open 114 points lower at 7,391, Germany’s DAX fell 285 points to 15,986, France’s CAC 40 fell 141 points at 7,235 and Italy’s FTSE MIB 506 points lower to 27,448 according to data from 27,448.

European markets are set to follow their Asian and Pacific counterparts lower on Thursday, following losses in the US during Wednesday’s trading session.

The decline came after minutes from the US Federal Reserve’s meeting in December showed that officials are ready to aggressively repel the central bank’s easy monetary policy from the pandemic.

The Fed’s plan to reduce the number of government bonds and mortgage-backed securities it holds comes as it is already downsizing its bond purchases and is set to raise interest rates after the downsizing is completed.

Major Wall Street indices fell sharply following the release of the minutes, with the S&P 500 falling 1.94% to 4,700.58. The Dow Jones Industrial Average fell 392.54 points to 36,407.11, while the technology-heavy Nasdaq Composite fell 3.34% to 15,100.17. US stock futures were subdued in overnight trading on Wednesday.

Data releases in Europe on Thursday include German industry orders for November and euro area producer prices for the same month.

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