European shares slip as investors brace for a rate hike

European shares fell as traders intensified their bets on raising the interest rate after statements tending to tighten from central bank officials, while shares of the German software giant SABB and French luxury goods Kering fell after the two companies announced the results of the first quarter of the year.

The European Stoxx 600 Index lost 0.8 percent and is heading to record the worst daily performance in more than two weeks, as it is on its way to end the week lower.

US Federal Reserve Chairman Jerome Powell said on Thursday that a 50 basis point rate increase “would be an option” at the US central bank’s May 3-4 meeting.

This came after statements by the Vice President of the European Central in which he supported ending the bond-buying program in July. On this basis, money markets expected an increase in the interest rate from the European Central by 80 basis points by December.

All European sub-sector indices declined, with retail and technology stocks leading the declines.

And French Kering shares fell 5.3 percent after it announced a decline in sales of Gucci due to the closure measures in China.

Shares in Germany’s SABB fell 2.9 percent after it expected a decline in revenue of up to 300 million euros due to its exit from Russia.

The French CAC index fell 1.1 percent before the second round of the presidential election, which will be held on Sunday.