European shares open lower after US interest rate hike

European shares started lower on Thursday, with technology shares leading the decline, after the US Federal Reserve announced another big increase in interest rates and signaled further increases in its battle to contain rising inflation.

The Stoxx 600 index fell 1.5 percent by 0707 GMT, and the German DAX lost 1.8 percent. European technology stocks, which are sensitive to interest rates, tumbled 2.6 percent.

On Wednesday, the Federal Reserve raised interest rates by 75 basis points for the third time in a row, and expected the target interest rate at its highest level since 2008, to rise to a range of 4.25-4.50 percent by the end of the year.

Meanwhile, European Central Bank Governing Council member Isabel Schnabel said interest rates should continue to be raised because inflation remains very high, even as the eurozone faces economic deflation.

Britain’s FTSE 100 index fell by 1 percent ahead of what is likely to be the second major rate hike by the Bank of England later on Thursday.