European stocks are getting hammered

European stocks are taking a pummelling on Monday morning, with all of the major bourses across the continent down more than 1% to start the week.

Markets are preparing themselves for an interest rate hike from the US Federal Reserve, while also getting jittery about the general health of the global economy.

As a result, shares in major European economies are selling off sharply on the day so far. Around 8:10 a.m. BST (3:10 a.m. ET) the biggest faller is Germany's DAX, lower by just shy of 2%. France's CAC 40 is not far behind with a fall of 1.8%.

Germany's major benchmark index is being pulled lower by energy firm E.ON, which has lost more than 12% in early trade. Here is how the DAX looked a few minutes ago:

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In Britain, stocks are relatively unscathed compared to many of their cross-channel counterparts, but have still taken a substantial hit, with the FTSE 100 down by more than 1.4%. Mining and banking stocks are providing the biggest drag on shares so far on the day. Here is how the FTSE looks:

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And here is the scoreboard for the rest of Europe, a sea of red:

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The moves in Europe on Monday follow a terrible day in Asia, where all major stock indices fell by around 2%, following the move in US markets on Friday. As was the case then, the moves today are being driven by a shift in investor sentiment towards the outlook for central bank policy.

All of a sudden a US rate hike, perhaps as soon as September 21, is now seriously being considered by investors. Hopes for further stimulus from the ECB, BOJ and BOE, among others, is also being questioned.

Commenting on the market movements on Monday, Mike van Dulken of Accendo Markets noted:

"A negative open comes as markets price in a higher probability that the US Fed will hike rates again next month. This comes after Boston Fed Governor Rosengren (FOMC voter) reiterated a hawkish message on Friday that served as the nail in the coffin for market concerns regarding global monetary policy divergence."

While Research Analyst Lukman Otunuga at Forex Time argues:

"Global stocks may be poised for steeper losses if the combination of central bank caution and fading optimism towards the effectiveness of stimulus measures forces investors to scatter from riskier assets. With concerns still elevated over the health of the global economy and the oversupply woes ensuring oil prices remain depressed, stock markets could be set for a heavy selloff."