European stocks slip as post-Fed rally fades, retailers drag

European stocks slipped on Thursday after the U.S. Federal Reserve's decision to raise interest rates aggressively fuelled concerns about a potential recession at a time when global economies are facing sky-high inflation. The continent-wide STOXX 600 index dipped 0.4% by 0710 GMT, even though European stock futures recovered overnight after Wall Street rallied to close higher.

European stocks slipped on Thursday after the U.S. Federal Reserve's decision to raise interest rates aggressively fuelled concerns about a potential recession at a time when global economies are facing sky-high inflation.

The continent-wide STOXX 600 index dipped 0.4% by 0710 GMT, even though European stock futures recovered overnight after Wall Street rallied to close higher. The retail sector fell the most and was down 2.1% as British online fashion retailer ASOS slumped 14.3% after warning inflationary pressures were affecting shopping behavior.

German rival Zalando dropped 7%. The Fed on Wednesday raised its target interest rate by 75 basis points, its biggest rate hike since 1994, and projected a slowing economy and rising unemployment in the months to come.

UK's blue-chip FTSE 100 fell 0.5% ahead of a Bank of England policy meeting expected to result in another interest rate hike. Swiss drugmaker Roche slipped 0.6% after it said its Alzheimer's medicine crenezumab did not slow or prevent cognitive decline in people.