European shares fall after Wall Street declines on interest rate hike fears

European shares fell on Thursday, pulled down by steep losses on Wall Street overnight, after US inflation data fueled concerns about the impact of higher interest rates on economic growth.

The pan-European Stoxx 600 index fell 1.7 percent, losing many of the gains it made in the middle of the week. Technology stocks, automakers and mining were among the biggest losers.

The Nasdaq Composite Index, which is dominated by technology companies in the US Stock Exchange, fell more than 3 percent on Wednesday, as investors bet on larger increases in interest rates from the Federal Reserve after the decline in consumer prices in April, but to a lesser extent than economists had expected.

Concerns about monetary policy tightening, an economic slowdown in China and rising inflation raised fears of a recession, pushing the Stoxx 600 Index down 6.7 percent in May.

Adding to fears, Russian gas flows to Europe via Ukraine fell by a quarter after Kyiv stopped using a major transit route, the first time exports through Ukraine had been disrupted since the invasion.

Commerzbank shares fell 1.7 percent, despite confirming that full-year net profit exceeded 1 billion euros.

Siemens shares fell 4.5 percent after the company said it would withdraw from the Russian market due to the war in Ukraine, which led to a loss of nearly 600 million euros ($630.18 million) in the second quarter.

French-Italian chip maker ST Microelectronics rose 2.4 percent after it forecast annual sales of more than $20 billion by 2027 at the latest.