Rising bond yields shake global stocks


European markets pulled back on Thursday morning as a surge in bond yields sent nerves back to global equities once again.

The pan-European Stoxx 600 lost 0.7% mid-morning, with core resources falling 3.9% as most sectors fell into the red. Utilities bucked the downward trend to rise 0.6%.

European stocks received a weak transfer from Asia-Pacific, where Japan’s Nikkei 225 and Hong Kong’s Hang Seng Index fell more than 2% to lead losses as the yield on 10-year US Treasuries returned. to go up. However, the yield stabilized a bit on Thursday morning and was last seen at 1.4671%.

US equity futures also point to further losses at Thursday’s open market, accelerating Wednesday’s declines for major indices as yields rose. Last week, the 10-year yield rose to a high of 1.6% in a move some described as a “sudden” spike, but which sparked fears over equity valuations and rising inflation.

Tech stocks have been the main casualty of the pullback, with investors targeting stocks that are seen as having the potential to benefit from an economic recovery, in the wake of Covid-19 vaccination launches and progress toward a package of US fiscal stimulus

Investors in the United States will be watching for a speech by Federal Reserve Chairman Jerome Powell later Thursday for indications on the direction of growth and inflation.

On the data front, IHS Markit Construction PMI (Purchasing Managers Index) readings for February are due Thursday morning for the UK, Germany, France, Italy and the wider euro zone.

It’s another busy day for earnings in Europe, which promises to be a key driver of individual share price action. Thales, Lufthansa, Merck, ProSiebenSat.1 and Aviva were among those who reported ahead of the bell.

Lufthansa posted a lower-than-expected net loss in the fourth quarter, but posted an annual loss of 6.7 billion euros ($ 8.1 billion) in 2020. The airline has warned that it will have difficulty profiting from flights before the end of 2021, as the pandemic continues to hit the demand for air travel.

German food processing company GEA Group rose 3.7% to lead the Stoxx 600 mid-morning after increasing its profitability in 2020 and projecting revenue and profit growth in 2021.

Aviva exceeded the company’s expectations by posting a flat 2020 operating profit of £ 3.2bn ($ 4.5bn) and sold its remaining businesses in Italy to focus on core markets, causing the British insurer’s shares to rose 1.8% by mid-morning.

At the bottom of the first-class European index, Anglo-Australian mining titan Rio Tinto fell more than 6%, after President Simon Thompson announced he would resign over the company’s destruction of a 46,000-year-old indigenous site in Australia. Western.

ProSiebenSat.1 shares fell 4.8% after the company projected single-digit revenue growth in 2021 despite a strong fourth quarter.

– CNBC’s Pippa Stevens contributed to this report.

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