European markets are heading for a lower open on Thursday as a rise in a bond yields saw jitters return to global stocks once again. Britain’s FTSE 100 is seen around 67 points lower at 6,608, Germany’s DAX is set to fall by around 118 points to 13,662 and France’s CAC 40 is expected to open around 41 points lower at 5,789, according to IG data.
European Markets Set For Lower Open
European markets are set to receive a weak handover from Asia-Pacific, where Japan’s Nikkei 225 and Hong Kong’s Hang Seng index dropped more than 2% to lead losses as the 10-year U.S. Treasury yield rose again, last seen at 1.4757%. U.S. stock futures are also pointing to further losses at Thursday’s market open, accelerating Wednesday’s declines for major indexes as yields climbed.
Last week, the 10-year yield surged to a high of 1.6% in a move that some described as a “flash” spike, but which sparked fears about stock valuations and rising inflation. Tech stocks have been the major casualty of the retreat, with investors pivoting to stocks seen as having potential to benefit from an economic recovery in the wake of Covid-19 vaccination rollouts and progress towards a U.S. fiscal stimulus package.
Investors stateside will be keeping an eye on a speech from Federal Reserve Chairman Jerome Powell later on Thursday for indications as to the direction of growth and inflation. On the data front, IHS Markit construction PMI (purchasing managers’ index) readings for February are due Thursday morning from the U.K., Germany, France, Italy and the wider euro zone. It’s another busy day for earnings in Europe, which promise to be a key driver of individual share price action. Thales, Lufthansa, Merck, ProSiebenSat.1 and Aviva were among those reporting before the bell.