European stock futures are down more than 1% as bond sales deepen

(Reuters) – European stock index times fell more than 1% on Friday, following a sharp loss on Wall Street and in Asian markets as a jump in bond yields and concerns about high equity valuations worry demand for riskier assets.

Euro Stoxx 50 futures fell 1.7% by 0637 GMT, while FTSE futures and DAX futures fell 1.2% and 1.4%, respectively.

Asian markets fell to a one-month low, while the dollar rose from a three-year pool as Treasury yields hit a one-year high of 1.614%, fearing the losses could be heavy. causing a disproportionate sale in other assets.

“This sharp push higher (in bond yields) seems to be starting to blow out some of the most valuable segments of the market, starting with the question of whether investors will move this money to the weakest parts, which have begun to show signs of life, ”said Michael Hewson, market analyst at CMC Markets UK.

High-flying technology stocks are the main impact of sales this week after regaining power on the global stock market from a crash caused by last year’s coronavirus.

On the other hand, energy, banking and mining stocks have outperformed the STOXX 600 in terms of expectations of a build-up in industrial activity following the release of vaccines.

However, the European index is set to post its first weekly decline in four as promises from European Central Bank chief Christine Lagarde and other policymakers have failed to halt a rise in yields. .

On Friday, ECB chief economist Philip Lane said the central bank was monitoring the rise in government bond lending costs but would not be involved in controlling the yield curve.

Meanwhile, better – than – expected fourth – quarter earnings have bolstered hopes of a faster corporate rebound this year. Of the 194 companies in the STOXX 600 that have reported quarterly earnings to date, 68% have hit analyst estimates, according to Refinitiv.

German Deutsche Telekom reported fourth-quarter results that were forecast on Friday as their US integrated unit T-Mobile continued to lead growth.

On Wall Street, Nasdaq 100 shed futures monitor 0.9%, a day after the Nasdaq Composite posted its biggest daily percentage fall in four months. E-mini S&P futures were down 0.4%.