European Stocks End Lower Following US Fed's Hawkish Stance

European stocks closed the week in the red as global sentiment was impacted by the US Federal Reserve's hawkish approach to inflation, indicating immediate interest rate increases.

The Stoxx Europe 600 was down 1%, and Germany's DAX slipped 0.9%. The Swiss Market Index and France's CAC fell 0.8%, and the FTSE 100 in the UK lost 0.3%.

The UK's gross domestic product climbed 0.9% in November, rising above its pre-COVID-19 level for the first time, according to estimates from the Office for National Statistics. The latest reading exceeded the estimate of a 0.4% growth and the 0.2% increase recorded in October.

The euro area recorded a trade deficit of 1.5 billion euros ($1.72 billion) in November, compared with a trade surplus of 3.6 billion euros in October and 25 billion euros a year earlier, Eurostat said. Across the European Union, the trade deficit was 8.3 billion euros in November, against a surplus of 24.5 billion euros in November 2020.

Germany's gross domestic product rose 2.7% in 2021 even with the ongoing COVID-19 pandemic, delivery bottlenecks, and material shortages, the Federal Statistical Office said. The figure compares with a 4.6% GDP drop in 2020 and 1.1% growth in 2019, the annual average over the last decade. It is also in line with market expectations.

On the corporate front, Electricite de France EEDF was down over 14% after it said it forecasts full-year EBITDA to fall by 8.4 billion euros ($9.64 billion) based on the market prices on Dec. 31, and by 7.7 billion euros based on the market prices on Jan. 12.

Meanwhile, France nuclear watchdog ASN said that the nuclear electric power generation company might have to consider the closure of reactors not included in its planning, Reuters reported, citing ASN's joint Chief Executive Julien Collet.