European shares drop 1% as investors brace for Fed stimulus

European shares drop 1% as investors brace for Fed stimulus

On Monday, Asian shares dropped 1% to a near two-month low, tracking Western stocks lower as investors feared major central banks would start sending signals about tapering their Pandemic-era stimulus programmes at various meetings this week.

The pan-European STOXX 600 index was down 1.4% by 0706 GMT, with energy and mining stocks leading declines on a weakening of commodities prices.

The benchmark European stocks index has now fallen for three straight weeks on worries about slowing global growth and the spillover from tighter regulation of Chinese firms.

The U.S. Federal Reserve's policy meeting is in focus on Tuesday and Wednesday, where the central bank is expected to lay the groundwork for a tapering. On Thursday, the Bank of England holds its own policy meeting.

German stock market plunged 1.6% as data showed a bigger-than-expected jump in producer prices last month.

The benchmark german index began trading on Monday with an increased of the number of constituents to 40 from 30.

In business news, Lufthansa dropped 0.6% after saying it expects to raise 2.14 billion euros $1.51 billion to pay back part of a government bailout that had been secured by Germany during the Coronavirus crisis and followed its growth prospects into 2022.