LONDON – European markets retreated Friday after a spike in bond yields rekindled concerns about stock valuations, while a decision by the US Federal Reserve not to extend a pandemic-era rule that had allowed banks to reduce the capital level, further hit the risky assets.
The pan-European Stoxx 600 fell 1.1% during afternoon trading, with banks falling 2.7% to bear losses as all sectors except utilities slid into the red.
US stocks plummeted on Friday after the Fed refused to extend a rule that expired at the end of the month that eased the additional leverage ratio for banks during the pandemic.
European equities started the day with a weak transfer from Asia-Pacific, where stocks fell mainly during Friday’s trading following the sell-off to the Stateside on Thursday. Following its last monetary policy meeting, the Bank of Japan announced a series of measures, including widening the bandwidth within which the yield on 10-year Japanese government bonds is allowed to fluctuate from the target level to between plus and minus 0.25%.
Oil prices are also in focus following a slump on Friday as reports of new waves of coronavirus infections and further lockdown measures in Europe dampen the outlook for crude oil demand.
Germany and France are among the countries to resume roll-out of the AstraZeneca / University of Oxford Covid-19 vaccine Friday, after UK and European drug regulators recommended continuing to use it following concerns about a small number of recipients developing blood clots .
As for the data, UK consumer sentiment hit a one-year high in March, according to a GfK survey, with hopes for a fast-growing economic recovery as the country tries to get out of country lockdown measures in the coming months.
In terms of individual price movements, TeamViewer fell 12% during midday deals after the German remote software company lowered its outlook for 2021.
According to Danish media reports, Danish IT consultancy Netcompany climbed 3% after winning a contract to develop Denmark’s coronavirus passport for use from May.
– CNBC’s Yun Li and Jesse Pound contributed to this report.
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