Investing.com - European stocks opened sharply lower on Thursday, as uncertainty over the timing of future U.S. rate hikes following comments by Federal Reserve Chair Janet Yellen weighed on equities.
During European morning trade, the EURO STOXX 50 lost 2.97%, France’s CAC 40 dove 2.94%, while Germany’s DAX 30 tumbled 2.54%.
In testimony to Congress on Wednesday, Fed Chair Janet Yellen said conditions in the U.S. would allow it to pursue "gradual" adjustments to monetary policy.
Yellen said the US economy faces a number of global threats that could derail growth and compel the Fed to slow the pace of future interest rate hikes.
While the Fed expects to raise interest rates gradually, it is not on any pre-set course, Yellen said, adding that the central bank would likely move slower "if the economy were to disappoint".
Investors were eyeing Yellen’s second day of testimony scheduled later Thursday.
Financial stocks were broadly lower, as French lenders BNP Paribas (PA:BNPP) and Societe Generale (PA:SOGN) dove 4.97% and 9.80%, while Germany’s Deutsche Bank (DE:DBKGn) and Commerzbank (DE:CBKG) plunged 4.94% and 4.82%.
Among peripheral lenders, Italy’s Intesa Sanpaolo (MI:ISP) and Unicredit (MI:CRDI) lost 3.75% and 4.90% respectively, while Spanish banks Banco Santander (MC:SAN) and BBVA (MC:BBVA) plummeted 3.60% and 2.68%.
Elsewhere, French oil and gas major Total SA (PA:TOTF) tumbled 2.20% after reporting a 26% year-on-year drop in fourth quarter adjusted net income.
On the upside, Publicis Groupe SA (PA:PUBP) saw shares surge 6.07% after the French advertising group reported a 2.8% increase in fourth-quarter sales but predicted "modest organic growth" for 2016.
In London, commodity-heavy FTSE 100 plunged 2.24%, weighed by sharp losses in the mining sector.
Shares in Bhp Billiton (L:BLT) lost 5.93% and Glencore (L:GLEN) plummeted 6.10%, while rival company Rio Tinto (L:RIO) dove 8.19%.
Earlier Thursday, Rio Tinto reported a net loss of $866 million in 2015 and said it was scrapping its "progressive dividend policy".
Financial stocks were also on the downside, as Lloyds Banking (L:LLOY) and HSBC Holdings (L:HSBA) tumbled 3.07% and 3.08% respectively, while Lloyds Banking retreated 3.21% and the Royal Bank of Scotland (L:RBS) sank 3.65%.
Meanwhile, Imperial Brands PLC (L:IMT) climbed 0.54% after the tobacco company reported an increase in first-quarter revenues.
In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 1.31% loss, S&P 500 futures a 1.26% drop, while the Nasdaq 100 futures indicated a 1.48% plunge.