European shares fell at the opening on Wednesday as Russia partially mobilizing more troops added to investors worries over U.S. Federal Reserve’s likely third straight super-sized interest rate hike later in the day.
The continent-wide STOXX 600 index dropped 0.3%, with most of its sub-sectors lower. Rate-sensitive technology sector index fell 1.2%, while energy stocks gained 1% amid a rise in oil prices following the news of mobilization.
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Russian President Vladimir Putin ordered a partial mobilization of its 2 million-strong military reserves, in a significant escalation of the conflict in Ukraine. This is Moscow’s first mobilization since World War Two.
The Fed is seen raising its benchmark lending rate by 75 basis points (bps) later in the day, continuing its aggressive fight against persistently high inflation. Some traders also expect the U.S. central bank to increase rates by a full percentage point.
In a bright spot, Fortum’s shares surged 14.6% to the top of the STOXX 600, after Germany agreed to nationalize Uniper by buying its stake in the gas importer. (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Sriraj Kalluvila)