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European shares slumped to their lowest level in three months on Thursday, as heightened concerns about further interest rate hikes globally dented risk sentiment, while shares of Embracer group slid after a discounted share issue.

The pan-European STOXX 600 index deepened losses by the close to fall 2.3% to its lowest level since late March, while the EURO STOXX 50 index plunged 2.9%.

France’s CAC 40, led regional declines, falling 3.1%.

Worries of higher rates for longer were exacerbated after a survey showed U.S. private payrolls increased more than expected in June, indicating the labour market remained strong despite growing risks of a recession from higher rates.

This comes after the U.S. Federal Reserve’s minutes on Wednesday showed that a united central bank agreed to hold rates steady at the June meeting to buy time and assess need for further rate hikes.

“Equities were already under heavy pressure coming into Thursday’s session following hawkish Fed minutes, but a remarkably robust ADP payroll report has put the boot in,” said Chris Beauchamp, chief market analyst at online trading platform IG.

“The stage seems set for the two additional rate hikes that the Fed alluded to at the June decision, as the US economy continues to show remarkable resilience.”

Germany’s two-year bond yield, which is highly sensitive to interest-rate expectations, rose its highest since autumn 2008, also pressuring equities.

Technology stocks fell 3.0%, while the real estate sector, which are often treated as bond proxies, tumbled 4.2%.

Meanwhile, U.S. Treasury Secretary Janet Yellen’s first trip to China will be on investors’ radar as she is likely to focus on recalibrating ties between the world’s two largest economies after Beijing’s new restrictions on exports of some metals sparked tensions.

German industrial orders rose significantly more than expected in May, due to large scale orders of ships, spacecraft and military vehicles.

UK’s Currys dropped to a 20-year low, falling 9.7%, as the British electricals retailer said it is not paying a final dividend after reporting a 38% fall in full year profit.

Embracer, the top loser on the STOXX 600, fell 13.8% after the gaming group raised 2 billion crowns ($182 million) in a share issue directed to institutional investors.

In a bright spot, FinecoBank rose 6.0% after the asset gatherer sees 765 million euros in inflows in June as cash flows out of deposits and into assets under management (AUM) products.

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