European stocks retreat, with Fed policy and rising bond yields in focus; Stoxx 600 down 1%
LONDON — European stocks were lower on Tuesday as global investors remain attuned to the policy direction of the U.S. Federal Reserve and the start of corporate earnings season
| TICKER | COMPANY | NAME | PRICE | CHANGE | %CHANGE | VOLUME |
|---|---|---|---|---|---|---|
| .FTSE | FTSE 100 | *FTSE | 7568.62 | -42.61 | -0.56 | 543833732 |
| .GDAXI | DAX | *DAX | 15787.95 | -145.77 | -0.91 | 46943951 |
| .FCHI | CAC 40 Index | CAC | 7132.98 | -68.66 | -0.95 | 48500391 |
The pan-European Stoxx 600 slid 1.2% by late morning, with tech and travel stocks each dropping 2.2% to lead losses, while oil and gas gained 0.6% on the back of a surge in oil prices amid rising tensions in the Middle East
In terms of individual share price movement, German used car dealer Auto1 Group fell more than 6% after its fourth-quarter earnings report, while at the top of the European blue chip index, Sweden’s Lundin Energy gained 3.8%
Global markets have been focused of late on assessing the potential speed and trajectory at which the Fed will move to hike interest rates and tighten its ultra-loose pandemic-era monetary policy. The central bank’s increasingly hawkish tone has led to a rise in bond yields, which spiked again on Tuesday and roiled risk assets
Meanwhile, corporate earnings are beginning to roll in for the fourth quarter of 2021, with Goldman Sachs and PNC Financial among the big names reporting stateside on Tuesday. Bank of America, UnitedHealth and Netflix are also due to report later in the week
U.S. stock futures fell sharply in early premarket trading on Tuesday as investors reacted to rising bond yields, after markets were closed Monday for the Martin Luther King holiday
Shares in Asia-Pacific lost momentum on Tuesday to erase earlier gains. The Bank of Japan left its short-term interest rate target unchanged at -0.1%, in line with market expectations, and raised its near-term inflation expectations
Back in Europe, the Economic and Financial Affairs Council is meeting in Brussels on Tuesday. The meeting comes a day after German Chancellor Olaf Scholz and Spanish Prime Minister Pedro Sanchez vowed to work closer together on continental policies despite divergence over the relaxation of EU fiscal rules
On the data front, the latest ZEW economic sentiment survey for Germany came in well above expectations, hitting 51.7 points for January versus 29.9 in December, with a Reuters poll having projected a reading of 32.0
Oil prices surged on Tuesday, with Brent crude touching a more than seven-year high amid concerns over potential supply disruptions, following attacks by Yemen’s Iran-aligned Houthi rebel group on fuel tankers in the United Arab Emirates
