European stocks fell after the European Central Bank’s statements

European stocks experienced a sharp decline at the beginning of Wednesday’s trading session, influenced by statements from European Central Bank officials that diminished expectations of interest rate cuts. Additionally, lower-than-expected Chinese economic data contributed to a negative market sentiment.

The European STOXX 600 index dropped by 1.2 percent as of 0814 GMT, reaching its lowest levels in over a month.

European Central Bank President Christine Lagarde, in the latest statement from policymakers, expressed confidence that the bank is on the right path to bring inflation back to its target level of two percent. Dutch Central Bank President Claes Knut added that markets are moving too quickly in anticipating interest rate cuts.

As a result, traders adjusted their expectations for a 150 basis point interest rate cut, postponing it from March to April.

Simultaneously, data revealed that China’s economic growth rate in the fourth quarter of the previous year was lower than market expectations, intensifying risk aversion in stock purchases.

Shares of LVMH and Kering Luxury Goods, exposed to the Chinese market, declined by 1.6 and 2.0 percent, respectively.

In other significant stock movements, Worldline rose by 2.6 percent following reports that the payments group was exploring options to reassure shareholders and avoid a takeover.