European markets open to close, stocks, data, earnings

European markets closed lower Tuesday after giving up earlier gains following hawkish comments from an ECB official.

The pan-European Stoxx 600 closed down by 0.7% provisionally, having initially climbed about 0.8% in early trade Basic resources stocks slumped 3% to lead the losses with most sectors and major bourses dipping into negative territory.

It comes after European Central Bank policymaker Madis Muller said the central bank should consider a 75-basis-point rate hike in September to tackle sky-high inflation, adding to a chorus of hawkish commentary from central bankers in recent days.

At a top central bankers’ conference last week, Federal Reserve Chair Jerome Powell signaled higher interest rates would likely persist in a bid to tame soaring inflation.

In his much-anticipated annual policy speech at Jackson Hole, Wyoming, Powell said that the Fed will “use our tools forcefully” to control inflation, which is still running near its highest level in more than 40 years. He acknowledged that rising interest rates will cause “some pain” to households and businesses.

Powell’s comments were echoed by European Central Bank board member Isabel Schnabel over the weekend. Schnabel reaffirmed the view that central banks must act aggressively to tackle rising inflation, even if that means dragging their economies into a recession.