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European stocks fall as bond yields spike; Ubisoft up 12% on M&A speculation

Soegeefx AppsEU MarketEuropean stocks fall as bond yields spike; Ubisoft up 12% on M&A speculation

Key Points

  • 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.
  • Oil prices surged during Asian trading hours, with Brent crude touching a more than seven-year high amid concerns over potential supply disruptions.

LONDON — European stocks closed lower on Tuesday, as investors reacted to developments in the oil and bond markets.

TICKER COMPANY NAME PRICE CHANGE %CHANGE VOLUME
.FTSE FTSE 100 *FTSE 7561.06 -2.49 -0.03 36275844
.GDAXI DAX *DAX 15696.79 -75.77 -0.48 4100761
.FCHI CAC 40 Index CAC 7130.86 -2.97 -0.04 6072931

The pan-European Stoxx 600 ended the day down 1%, with tech stocks dropping 2.2% to lead the losses as most sectors and major bourses slipped into negative territory. Oil and gas shares were the standout gainers, rising 1.1% on the back of a surge in oil prices amid rising tensions in the Middle East.

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 U.S. bond yields, which spiked again on Tuesday and roiled risk assets. In Europe, the yield on the benchmark U.K. gilt climbed to 1.222%. Bond yields move inversely to prices.

In terms of individual share price movement, German used car dealer Auto1 Group fell 3.9% after its fourth-quarter earnings report.

At the top of the European blue chip index, French video game publisher Ubisoft climbed 11.9% after news that Microsoft has agreed to acquire Activision Blizzard for nearly $69 billion.

The move led to speculation that rival publishers, such as Ubisoft and Poland’s CD Projekt, may be vulnerable to takeover bids themselves. CD Projekt shares were up 1.3%.

U.S. stocks fell sharply on Tuesday as investors reacted to rising bond yields, after markets were closed Monday for the Martin Luther King holiday.

Back in Europe, the Economic and Financial Affairs Council met 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.

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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.

Source : CNBC

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