European stocks fell in early trade on Friday as investors continued to mull recent moves by central banks, with Credit Suisse sharply lower.
The benchmark Stoxx 600 index and France’s CAC 40 were both down 0.4%, while Germany’s DAX was 0.5% lower.
Richard Hunter, head of markets at Interactive Investor, said: “A week dominated by further aggressive monetary tightening around the world has left equity markets bruised on a deteriorating outlook.
“Quite apart from the Federal Reserve’s expected 0.75% hike, there were also notable increases in interest rates in the likes of the UK and Switzerland, as the central bank merry-go-round continues to increase the likelihood of recession on a global scale.
“For the US, growth stocks were again badly hit, especially big tech where future earnings are being jeopardised by higher rates. In addition, pessimistic outlooks from the likes of Ford and FedEx dampened sentiment further. With the third quarter reporting season due to begin in the next few weeks, analysts are taking red pens to earnings estimates as the worsening monetary backdrop begins to truly bite. Earnings growth for the third quarter is already estimated to fall to 5%, and excluding the energy sector, could even drop into negative territory.”
On the data front, the S&P Global eurozone manufacturing and services purchasing managers’ indices for September are due at 0900 BST.
In corporate news, Credit Suisse tumbled nearly 6% following a Reuters report the bank is looking to raise fresh cash.
