LONDON (ShareCast) - (Sharecast News) - European shares ended the session mostly lower, tracking an intra-day dip on Wall Street as longer-term Treasury yields moved higher.
Triggering the move, first quarter US GDP growth was reported at an annualised rate of 6.4%, but more importantly, the so-called GDP price deflator overshot forecasts by a wide margin.

Due to transitory supply bottlenecks? That was literally the question on everyone's mind.

"Having got off to such a good start, and US data looking so promising it's a little surprising to see stocks slide back, however today's gains appear to be being tempered by a sharp rise in US 10-year yields, which at the time of writing are up 7bps, and appear to be acting as a bit of a drag," said Michael Hewson, chief market analyst at CMC Markets UK.

Shares had begun the day on the up after strong corporate earnings across the region and the US Federal Reserve's overnight decision to maintain loose monetary policy.

The pan-European STOXX 600 index dipped 0.26% to 438.77, alongside a 0.9% drop for the German Dax to 15,154.20.

Milan's FTSE Mibtel gave back 0.74% to 24,278.2, while the Ibex 35 in Madrid added 0.27% to 8,823.2.

Automakers and suppliers were the biggest drag on the Stoxx 600, with the sector sub-index down 2.63% after US carmaker Ford said on Wednesday evening that a global semiconductor shortage may slash second-quarter production by half. Faurecia, Volkswagen and Continental were all lower.

Banks on the other hand were unperturbed by the rise in government bond yields, rather the opposite, with the Stoxx 600 sector gauge gaining 1.42%.

In other equity news, Finnish telecoms heavyweight Nokia topped the index, surging 15% as growth in sales of network and 5G equipment boosted quarterly earnings.

Shares in medical equipment specialist Smith & Nephew rose 6% as the company reinstated full year guidance after a rise in first quarter revenues driven by increased surgery volumes, acquisitions and new products.

Revenue for the three months to April 3 came in at $1.26bn, up 11.5% on a reported basis and 6.2% on an underlying basis and including a 3.4% boost from foreign exchange and 1.9% from acquisitions.

Consumer goods giant Unilever rose 3.3% as a pick up in home cooking and a strong economic recovery in China drove better-than-expected quarterly sales. The company also announced a share buyback programme up to £3bn.

Oil giant Royal Dutch Shell slipped even as it raised its dividend by 4% after increasing first quarter profits, while French peer Total rose after reporting first-quarter earnings close to pre-pandemic levels.

French planemaker Airbus added 1% after it posted higher quarterly core earnings.

UK bank NatWest fell 3.4% despite reporting an 82% rise in first-quarter profit as its released money set aside for bad debts early in the Covid pandemic.

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