Europe close: Stocks slide as Wall Street selloff continues

European stocks ended lower as rising government bond yields across the Atlantic kept equities under pressure as traders bet on an early rise in US interest rates.

“Those hoping for a sunnier vibe from U.S. traders after their three-day weekend will have been disappointed,” said GI chief market analyst Chris Beauchamp.

“[…] It looks like the combination of earnings season and an impending FOMC decision continues to provide a powerful incentive to reduce exposure to US equities.”

The pan-European Stoxx 600 index fell 0.97% to 479.79, with technology stocks particularly under pressure. The Stoxx 600 gauge for tech issues ended the session down 2.19% at 754.87.

Meanwhile, oil prices hit a seven-year high on worries about possible supply disruptions after Yemen’s Houthi group attacked the United Arab Emirates. The news boosted the oil giants BP and Shell.

The German Dax was down 1.01% at 15,772.56, although it was off its session lows.

Benchmark 10-year German and Spanish government debt was little changed but under upward pressure, mimicking moves in US Treasury yields of the same maturity.

Investors now expect the US Federal Reserve to start raising interest rates from March in a bid to tame inflation, as UK jobs data beat expectations on Tuesday , making a rate hike in early February extremely likely.

Meanwhile, on the continent, the ZEW Institute’s economic confidence indicator for Germany jumped from 32.0 in December to 51.7 in January (consensus: 32.0).

In stock news, Vivendi Shares fell after the company announced it was investing in digital communications group Progressive Media through the purchase of an 8.5% stake from ZeWatchers.

french caterer Sodexo was higher according to reports that Bain Capital was looking to bid for a stake in its benefits and rewards services unit.

THG Shares fell to Stoxx lows after the British online retail platform reported a 29.7% increase in fourth-quarter revenue but said its adjusted core profit margin would be lower market expectations due to unfavorable currency movements.

888 Assets slipped even as the online betting and gaming company said full-year revenue rose year-on-year despite falling in the final quarter of 2021.

Mary I. Bruner