Hawkish US Policymakers Shake European Stock Markets

European shares dropped on Friday due to hawkish comments from U.S. policymakers, impacting hopes for an interest rate cut. STOXX 600 fell by 0.9% as investors adjusted expectations. Richemont and Siemens Energy shares surged amid the broader decline, while UK stocks faced pressure from policy reconsiderations and rising yields.

European shares took a downturn on Friday as hawkish sentiments from U.S. policymakers subdued hopes for an imminent interest rate cut. The pan-European STOXX 600 decreased by 0.9% to 575.22 points, with the banking sector especially affected by a nearly 2% drop.

This week's macroeconomic developments in the U.S. have been under close scrutiny, with investors initially hopeful that data releases might indicate a slowing economy, prompting the Federal Reserve to lower borrowing costs by December. However, these anticipations were dashed after an increasing number of Fed policymakers showed restraint on further easing.

On a brighter note, luxury group Richemont saw a 7.5% rise, lifting the luxury sector after reporting robust quarterly sales. Similarly, Siemens Energy surged 11.2% following its announcement to issue its first dividend in four years, along with an improved mid-term outlook. In contrast, UK stocks fell over 1% due to speculative fiscal policy adjustments.

(With inputs from agencies.)