Stock European Stocks Lower; Tech Stocks Hit by Higher...

European Stocks Lower; Tech Stocks Hit by Higher Yields


Stock Markets57 minutes ago (Sep 28, 2021 04:24AM ET)

(C) Reuters.

By Peter Nurse – European stock markets retreated Tuesday, with high-growth tech stocks pressured by rising bond yields, while investors digest the inconclusive German election and Chinese property group Evergrande’s ongoing debt crisis.

At 4:25 AM ET (0825 GMT), the DAX in Germany traded 1% lower, the CAC 40 in France fell 1.5% and the U.K.’s FTSE 100 dropped 0.6%.

Soaring U.S. Treasury yields following last week’s Federal Reserve meeting have translated into higher yields in Europe, with the yield on the benchmark 10-year German bund climbing 3 basis points Tuesday.

The tech sector has suffered as a consequence, with Logitech (NASDAQ:LOGI) stock falling 7.7%, not helped by Morgan Stanley (NYSE:MS) downgrading the Swiss company to ‘underweight’ from ‘equal weight’, and ASM International (OTC:ASMIY) stock falling 3.6% despite the Dutch semiconductor supplier raising its third-quarter order intake guidance.

On the flip side, financials were supported by the rising interest rates, with the likes of SEB (ST:SEBa), Aegon (NYSE:AEG), ABN (AS:ABNd), Raiffeisen (VIE:RBIV) and Virgin Money (LON:VM) all trading at 52-week highs. Eni (MI:ENI), BP (NYSE:BP) also reached 52-week highs as oil and gas prices continued to climb. Most notable was the 13-year high hit by Gazprom (MCX:GAZP), arguably the only company that can offer a reasonably quick fix to the shortage of gas in Europe.

Additionally, easyJet (LON:EZJ) stock fell 3.6% after the airline said it had received acceptances from investors for 93% of the new shares it sold as part of a 1.2 billion pound ($1.64 billion) fully underwritten rights issue.

Investors will be keeping an eye on the ramifications of Germany’s general election on Sunday, which resulted in the Social Democrats party narrowly winning the vote. Prolonged negotiations are likely to follow in order to form a coalition to govern Europe’s biggest economy, but the far left’s weak result has in all likelihood ruled it out as a potential partner, to the market’s relief.

Investors also continue to fret about the future of China Evergrande Group (HK:3333), and the potential for global contagion, after it failed on Friday to meet a deadline to make an interest payment to offshore bond holders. China’s economy is also suffering from spreading power outages, with the electricity system unable to meet demand from both households and industry.

Back in Europe, the European Central Bank will hold its annual research meeting, with ECB President Christine Lagarde’s speech sure to be watched for any sign that rising energy prices are changing the bank’s thinking about inflation. European gas and power prices surged to new record highs in early trade on Tuesday.

Ahead of that, the widely-watched German GfK consumer sentiment data showed a surprise rise in confidence in October, to +0.3 from a revised -1.1 the previous month.

Crude prices traded higher Tuesday, rising for the sixth consecutive session on concerns of a global supply crunch just as demand picks up with the easing of Covid-19 pandemic restrictions.

U.S. crude oil supply data from the American Petroleum Institute are due later in the day, as well as OPEC’s latest World Oil Outlook. By 4:25 AM ET, U.S. crude futures traded 1% higher at $76.22 a barrel, a two-month high. Brent rose 0.8% to $79.32, its highest since October 2018.

Additionally, gold futures fell 0.7% to $1,740.25/oz, while EUR/USD edged 0.1% lower to 1.1679.

European Stocks Lower; Tech Stocks Hit by Higher Yields

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Latest news

ASEAN excludes Myanmar junta leader from summit in rare move

World27 minutes ago (Oct 16, 2021 07:50AM ET) 2/2 (C) Reuters. FILE PHOTO: Flags are seen outside the Association of Southeast...

Biden to attend memorial service honoring U.S. law enforcement officers

World8 minutes ago (Oct 16, 2021 07:10AM ET) (C) Reuters. FILE PHOTO: U.S. President Joe Biden and first lady Dr....

Russia seeing record gas demand but still ready to boost EU supplies, Novak says

Commodities23 minutes ago (Oct 16, 2021 06:56AM ET) (C) Reuters. FILE PHOTO: Flames from a gas burner are reflected on...

Attackers Behind Trickbot Expanding Malware Distribution Channels

The operators behind the pernicious TrickBot malware have resurfaced with new tricks that aim to increase its foothold by...

Subscribe here

UK PM Johnson visits church where lawmaker was stabbed to death

World15 minutes ago (Oct 16, 2021 06:03AM ET) 5/5 (C) Reuters. Britain's Labour Party leader Keir Starmer, Prime Minister Boris Johnson...

NASA launches first space probe to study Jupiter’s Trojan asteroids

Stock Markets17 minutes ago (Oct 16, 2021 06:01AM ET) 5/5 (C) Reuters. The capsule with NASA's Lucy spacecraft, atop a United...

You might also likeRELATED
Recommended to you