LONDON — European markets pulled back slightly on Friday after a spike in bond yields reignited concerns about stock valuations and prompted a sell-off on Wall Street.
The pan-European Stoxx 600 was down 0.3% by late morning, with retail stocks dropping 1.6% to lead losses while utilities gained 1%.
European stocks received a weak handover from Asia-Pacific, where shares mostly declined during Friday’s trade following the overnight sell-off stateside.
Following its latest monetary policy meeting, the Bank of Japan announced a raft of measures that included widening the range at which the 10-year Japanese government bond yield is allowed to fluctuate from the target level to between plus and minus 0.25%.
The Bank of England kept interest rates and its bond buying program unchanged on Thursday, following the lead of the U.S. Federal Reserve with a cautious tone on the prospects for future rate hikes.
Technology stocks took the brunt of the pain stateside on Thursday, as the benchmark U.S.10-year Treasury yield jumped 11 basis points to break above 1.75% for the first time since January 2020. The Nasdaq Composite shed 3% to lodge its worst day since Feb. 25.
Futures tied to the major U.S. indexes inched into positive territory in premarket trade on Friday, as the 10-year yield mellowed to just above 1.69%.
Oil prices are also in focus after a slump on Friday, as reports of new waves of coronavirus infections and further lockdown measures in Europe dampened the outlook for crude demand.
Germany and France are among the countries resuming the rollout of the AstraZeneca/University of Oxford Covid-19 vaccine Friday, after British and European medicines regulators recommended it continue to be used following concerns over a small number of recipients developing blood clots.
On the data front, British consumer sentiment notched a one-year high in March, according to a GfK survey, with hopes for an imminent economic recovery growing, as the country seeks to emerge from nationwide lockdown measures in the coming months.
In terms of individual share price movement, Telecom Italia slid 5.3% to the bottom of the Stoxx 600 on uncertainty surrounding Italy’s single network project, according to Reuters. At the top of the index, Germany’s GEA Group gained 3.6% after UBS upgraded the stock to “buy” and raised its price target.
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