European markets open at close, stocks, data, earnings

European markets closed lower on Tuesday after giving up earlier gains following hawkish comments from an ECB official.

The pan-European Stoxx 600 tentatively closed down 0.7%, after initially climbing around 0.8% in early trade. Basic resources stocks fell 3% to lead the losses, with most sectors and major exchanges plunging into negative territory.

It comes after European Central Bank policy chief Madis Muller said the central bank should consider a 75 basis point rate hike in September to tackle soaring inflation, adding to a chorus of comments warmongers from central bankers in recent days.

At a conference of top central bankers last week, Federal Reserve Chairman Jerome Powell signaled that higher interest rates are likely to persist in a bid to bring soaring inflation under control.

In his highly anticipated annual policy address in Jackson Hole, Wyoming, Powell said the Fed “will use our tools forcefully” to control inflation, which is still near its highest level in more than 40 years. He acknowledged that rising interest rates would cause “a bit of pain” for households and businesses.

Powell’s comments were echoed by European Central Bank board member Isabel Schnabel over the weekend. Schnabel reiterated that central banks must act aggressively to fight rising inflation, even if it means dragging their economies into recession.

Edward N. Arrington