A basket of European bourses had winded down in red inks in a teeter-totter session on Friday, putting a halt to a three-straight week of gaining streak as investors seemingly had joined a mass-scale profit-taking wave over concerns of a higher inflation alongside a higher interest rate.
Apart from that, a jump in Treasury bond yields added to further strains in both European and American money markets. In point of fact, Friday’s faltering in European bourses was almost entirely galvanized by a profit-taking wave from the investors amid mounting worries over valuations alongside an inflation-surge in the cards that could prompt ECB (European Central Bank) to shrug off its dovish stance.
European stocks pummel amid frets over valuation, a higher interest rate
Citing statistics, in the day’s European market closure, the regional pan-European STOXX 600 ebbed off 1.6 per cent and fell as much as 2.4 per cent on the week, remarking its first weekly percentage decline this month with tech stocks bearing the heaviest brunt as they continued to pull back from a nearly two-decade high.
In tandem, resource stocks were slumped by the most in the day’s trading, dwindling as much as 4.2 per cent to mark up its worst intra-session decline in more than five months. Besides, as European stocks winded up the session broadly lower, London’s blue-chip index FTSE 100 dropped 2.53 per cent to 6,483.43, French CAC 40 curbed out 1.39 per cent to 5,703.22 and Frankfurt’s DAX lost 0.67 per cent to 13,786.29.
Elsewhere in the Europe, Madrid’s benchmark IBEX 35 shed 1.12 per cent to 8,225.00, while Italy’s FTSE MIB muzzled as much as 0.93 per cent to curtail the day at 22,848,58. Meanwhile, referring to a European equity market which seemed utterly overpriced at this standpoint, a strategist at SocGen, Roland Kaloyan said, “Equity markets across the U.S.
and Europe are quite expensive now and with bond yields constantly rising, the fixed income market is proving to be more attractive than the riskier equity market. Investors are actually looking at the pace at which yields drop and the current speed is quite concerning for equity markets”.