European shares hit 7-week low as interest rate hike fears grow

European shares started September sharply lower, as concerns about sharp increases in interest rates and record inflation rates in the region pushed the STOCK 600 index to its lowest level in seven weeks Thursday 1 September.

The European index fell for the fifth consecutive day, falling 0.8% by 0715 GMT.

All sectors fell during trading and interest rate sensitive technology stocks were among the biggest losers. Mining stocks fell 1.8 percent after metals prices fell.

And financial markets in the euro zone expect an 80% chance that the European Central Bank will raise interest rates by 75 basis points at its meeting next week, compared to just over 50% on Wednesday, August 31.

German Lufthansa shares fell 3.2% after the pilots’ union announced yesterday a strike scheduled to start on Friday after the two parties failed to reach an agreement on wages. Luxury goods stocks came under pressure, with LVMH, which owns Louis Vuitton, Hermes and Burberry, down between 1.6 percent and 2.2 percent.

Data showed German retail sales unexpectedly rose in July as the online retail sales and food sectors showed a recovery.