European markets pulled back on Thursday morning as a rise in bond yields returned jitters to global equities.
The pan-European Stoxx 600 lost 0.7% in mid-morning trading, while basic assets fell 3.9% as most sectors shifted into the red. Utilities entered the downward trend to gain 0.6%.
European equities saw a weak transfer from Asia-Pacific, where Japan’s Nikkei 225 and Hong Kong’s Hang Seng index fell more than 2% to lead to losses as 10-year US Treasury yields rose again. However, the yield stabilized a bit on Thursday morning and was last seen at 1.4671%.
US stock futures also point to further losses at Thursday’s market opening, accelerating Wednesday’s declines for major indices as interest rates rise. Last week, the 10-year yield rose to a high of 1.6%, a move that some describe as a “flash” spike, but which sparked fears of equity valuations and rising inflation.
Tech stocks were the biggest victim of the pullout, with investors moving towards stocks that could benefit from an economic recovery, in the wake of the rollout of Covid-19 vaccinations and progress towards a US fiscal stimulus package.
Investors in the States will watch a speech by Federal Reserve Chairman Jerome Powell later on Thursday for clues on the direction of growth and inflation.
In terms of data, IHS Markit figures for the PMI (purchasing managers index) are expected on Thursday morning from the UK, Germany, France, Italy and the wider Eurozone.
It’s another busy day for earnings in Europe, which will become a major driver of individual price movements. Thales, Lufthansa, Merck, ProSiebenSat.1 and Aviva were among those who came before the bell.
Lufthansa posted a smaller-than-expected net loss in the fourth quarter, but saw a full-year loss of EUR 6.7 billion ($ 8.1 billion) in 2020. The airline warned it will struggle to take advantage of flights before the end of 2021. the pandemic continues to depress demand for air travel.
German food processing company GEA Group climbed 3.7% by mid-morning to lead the Stoxx 600, after increasing its profitability in 2020 and predicting revenue and profit growth in 2021.
Aviva exceeded the company’s expectations to deliver flat operating profit in 2020 of £ 3.2 billion ($ 4.5 billion) and sold the remaining operations in Italy to focus on core markets, increasing the company’s shares British insurer mid-morning were 1.8% higher.
At the lower end of the European blue chip index, Anglo-Australian mining titan Rio Tinto fell more than 6% after Chairman Simon Thompson announced he would step down due to the company’s destruction of a 46,000-year-old indigenous site in Western Australia. Australia.
Shares of ProSiebenSat.1 fell 4.8% after the company forecast single-digit sales growth in 2021, despite a strong fourth quarter.
– CNBC’s Pippa Stevens contributed to this report.
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