LONDON – European markets retreated slightly on Friday, but are still up for a positive week as rising Treasury yields have reaffirmed some investor caution.
The pan-European Stoxx 600 fell 0.2% at the start of transactions, with technology stocks falling 1.2% to lead to losses, while banks rose 0.6%.
European equities received a fairly strong transfer from Asia-Pacific, where markets generally advanced during trading on Friday, after the S&P 500 hit record US trading hours on Thursday.
The momentum on Wall Street came after US President Joe Biden signed the law into a $ 1.9 trillion coronavirus aid package that would send direct payments of up to $ 1,400 to most Americans. Futures on major US indices were mixed on Friday at the start of premarket trading.
However, the yield on the 10-year US Treasury benchmark rose again on Friday morning after the stimulus passed, reaching a short 1.6%.
The European Central Bank on Thursday vowed to step up its “significant” bond-buying efforts in the second quarter, as borrowing costs rose across the continent, with European bond yields following higher US Treasury yields in the past month.
Investors were concerned that high bond yields could derail Europe’s economic recovery by raising borrowing costs for countries already facing the coronavirus crisis.
The European Union approved the single-shot Covid-19 vaccine on Thursday by Johnson & Johnson, as the bloc aims to start the slow launch of vaccination.
Meanwhile, Canada has insisted that the inoculation of AstraZeneca and Oxford University is safe after its use was suspended in Denmark, Norway and Iceland due to reports of blood clotting in some people who received the shot.
In terms of data, the UK economy fell by 2.9% in January compared to the previous month, official figures showed on Friday, a less severe contraction than expected as the country re-entered the national deadlock. .
“While the national blockade closed a number of industries, the impact on consumer industries was not as bad as it could have been,” said James Smith, a market economist developed at ING.
“But what really stands out is health spending, where the intensification of the government’s testing and monitoring scheme and vaccination programs has added 0.9% to GDP figures alone.”
The British luxury fashion brand Burberry saw its shares rise by more than 7% to the top of the Stoxx 600 at the beginning of transactions, after updating its guide following a strong return on sales.
At the bottom of the index, real estate developer Berkeley Group fell 4.8% after projecting linear profits in 2021.
Credit Suisse has fallen 4% as it faces questions from regulators about supply chain funding related to the collapsed Greenhill Capital, according to Reuters.
– Saheli Roy Choudhury of CNBC contributed to this report.
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