EUROPE MARKETS: Europe Stocks Mixed As Investors Warily Eye Climbing Bond Yields
October 09 2018 - 10:22AM
Dow Jones News
By William Watts, MarketWatch
European equities put in a mixed performance Tuesday as
investors fretted over bond yields, with those in Italy and the
U.S. resuming their climb.
What are major indexes doing?
The pan-European STOXX 600 was down 0.1% at 371.98.
In London, the FTSE 100 dropped 0.1% to 7,223.22, while in
Paris, the CAC 40 stock index was little changed at 5,302.31 and
Germany's DAX was marginaly lower at 11,944.25.
European stocks fell sharply on Monday, with Italy's FTSE MIB
index dropping more than 2% as Italian bond yields soared and the
spread between Italian and German bond yields widened, putting
heavy pressure on bank shares. On Tuesday, the Italian benchmark
index was up 0.8% to 20,012.86.
Read:Here's why investors remain uneasy about Italy's banks and
the 'doom loop'
(http://www.marketwatch.com/story/heres-why-investors-remain-uneasy-about-italys-banks-and-the-doom-loop-2018-10-08)
What's driving markets
Nervous investors continue to keep an eye on rising global bond
yields. The yield on the 10-year U.S. Treasury note briefly pushed
to a new seven-year high
(http://www.marketwatch.com/story/10-year-treasury-yield-nudges-to-seven-year-high-above-325-2018-10-09)
Tuesday above 3.25% after U.S. bond markets were closed Monday for
a holiday. In recent action, the 10-year yield was hovering at
3.216%. Yields and debt prices move in opposite directions.
Italy had appeared to stabilize somewhat in early action. The
yield on the 10-year government bond subsequently climbed 0.8% to
3.592%, however, and the closely watched spread between the Italian
bond and its German counterpart widened further.
The mixd tone in Europe came as U.S. stocks traded mostly lower
(http://www.marketwatch.com/story/stock-futures-drop-sp-on-track-for-4th-straight-decline-as-bond-yields-rise-2018-10-09)
in early action, and Asian markets steadied
(http://www.marketwatch.com/story/nikkei-slips-but-chinese-stocks-bounce-back-after-mondays-plunge-2018-10-08).
Chinese equities were mixed a day after selling off sharply as
traders returned from a weeklong holiday.
What are analysts saying
Worries over global growth and emerging-market worries as
U.S.-China trade tensions continue to overhang markets, said Naeem
Aslam, chief market analyst at Think Markets UK, in a note, citing,
among several factors, the International Monetary Fund's decision
Monday to cut its global growth forecast
(http://www.marketwatch.com/story/imf-downbeat-on-global-economic-outlook-2018-10-08)
for this year and next.
"Clearly, there is a risk and the new outlook suggests fatigue
is setting in and the mounting weakness in the emerging market
could further dampen the outlook," he said. " The risk to global
outlook have increased significantly in the past three months and
there is no clear solution when the ongoing trade war between the
U.S. and China will settle."
What stocks are moving
Among the positive sectors, oil stocks rose as crude prices
bounced back from the previous day's weakness, though not buy much.
Total SA (TOT) rose 0.7%, while shares of BP (BP.LN) rose 0.4%
Drug stocks were proving the biggest drag on the European index,
with Roche Holding Ltd. (ROG.EB) down 0.7% and Novozymes AS down
over 2%.
Shares of Airbus SE (AIR.FR) declined 1.4%. a day after the
company tapped the head of its plane-making unit, Guillaume Faury,
to succeed Tom Enders as chief executive in April, pending
shareholder approval.
Shares of Sage Group PLC (SGE.LN) shed 1.7% in London after
Barclays cut the software group to underweight.
-- Barbara Kollmeyer contributed to this report
(END) Dow Jones Newswires
October 09, 2018 10:07 ET (14:07 GMT)
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