Europe close: Stocks slip as selling on Wall Street continues
By Alexander Bueso
Date: Tuesday 18 Jan 2022
(Sharecast News) - European shares finished lower with rising government bond yields on the other side of the Atlantic kept equities under pressure as traders punted on an early rise in US interest rates.
"Those hoping for a sunnier mood from US traders following their three-day weekend will have been disappointed," said IG chief market analyst Chris Beauchamp.
"[...] It looks like the combination of earnings season plus a looming FOMC decision continues to produce a powerful incentive to cut back US equity exposure."
The pan-European Stoxx 600 index retreated 0.97% to 479.79 with technology stocks in particular coming under pressure. The Stoxx 600's gauge for tech issues ended the session 2.19% lower at 754.87.
Meanwhile, oil prices rose to a seven-year high on worries about possible supply disruptions after Yemen's Houthi group attacked the United Arab Emirates. The news boosted oil giants BP and Shell.
Germany's Dax was off by 1.01% at 15,772.56 albeit off its lows of the session.
Benchmark 10-year German and Spanish government debt were little changed, but under upwards pressure, mimmicking moves in yields on similarly-dated US Treasuries.
Investors now expect the US Federal Reserve to start lifting interest rates from March in an attempt to tame inflation while UK labour data on Tuesday beat expectations, making a rate rise in early February extremely likely.
On the Continent meantime, the ZEW institute's economic confidence gauge for Germany leaped higher from a reading of 32.0 for December to 51.7 in January (consensus: 32.0).
In equity news, Vivendi shares were lower after the company said it was investing in digital communication group Progressif Media through the purchase of an 8.5% stake from ZeWatchers.
French food caterer Sodexo was higher on reports Bain Capital was looking to bid for a stake in its benefits and rewards services unit.
THG shares slumped to the bottom of the Stoxx after the UK online retail platform reported a 29.7% rise in fourth-quarter revenue, but said its adjusted core earnings margin would fall short of market expectations due to adverse currency movements.
888 Holdings slipped even as the online betting and gaming company said full-year revenues had grown year-on-year despite a drop in the final quarter of 2021.
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