European stocks open lower after the US interest rate hike

European stocks opened lower on Thursday, after a weak trading session on Wall Street the day before, when the Federal Reserve announced a widely expected rate hike of 25 basis points, and hinted it might suspend monetary tightening soon.

The pan-European Stoxx 600 index was down 0.4% by 0808 GMT, after closing at its highest level in more than a week on Wednesday.

However, US stock futures settled after a turbulent session on Wall Street after the Fed raised the interest rate to a range between 4.75 and 5 percent despite the recent turmoil in the banking sector, but backed away from its talk of “continued increases” in interest.

European banking shares fell 1 percent, leading the losses in the financial sector. Citigroup downgraded the sector’s credit rating, warning that the rapid pace of interest rate hikes would affect economic activity and bank profits.

Investors expect interest rate hikes from the central banks of the United Kingdom, Norway and Switzerland later on Thursday.

While Sanofi shares rose 3.9 percent after the French pharmaceutical company said that its drug for the treatment of asthma and eczema, which it developed jointly with Regeneron, achieved all goals in trials to treat “smokers’ lung”.