Plus   Neg

European Shares Set To Extend Losses


European stocks look set to open sharply lower on Monday, extending the biggest selloff for global equities in two years as investors adjust to an era of higher global interest rates.

The recent surge in bond yields fueled by optimism about U.S. growth and earnings has led to expectations that the Federal Reserve will lift borrowing costs more than the three times initially expected this year.

Copper steadied, oil extended Friday's losses and gold prices eased, while a steeper yield curve weighed on the dollar.

Asian stocks are broadly lower, with benchmark indexes in Australia, Hong Kong, India, Japan and Taiwan losing 1-2 percent, as investors started factoring in the possibility of more aggressive policy tightening by the Federal Reserve.

This week is set to be fairly quiet in terms of economic data releases. Dallas Fed President Robert Kaplan and New York Fed President William Dudley are among Fed officials due to speak in New York after last week's FOMC meeting.

The composite PMI figures for the euro zone along with services purchasing managers indexes for France, Germany and the U.K. are due out later in the day.

Data released earlier in the day showed that China's private sector activity expanded at the fastest pace in seven years in January, driven by accelerated rates of activity growth across both manufacturing and services. The Caixin composite PMI rose to 53.7 from 53.0 in December.

Elsewhere, Japan's service sector activity expanded at a slightly faster pace in January, results of a survey by IHS Markit revealed.

U.S. stocks plunged on Friday, the dollar gained ground and oil prices slid on worries about the prospect of higher interest rates after the jobs report for January showed stronger than expected job growth and a jump in wages.

A negative reaction to quarterly results from big name tech companies like Google parent Alphabet and Apple also contributed to the sell-off.

The Dow lost 2.5 percent, the tech-heavy Nasdaq Composite tumbled 2 percent and the S&P 500 declined 2.1 percent.

European markets finished lower for a fifth day running on Friday following a rapid jump in bond yields and weak earnings reports from the likes of Deutsche Bank and Caixa Bank.

The pan-European Stoxx 600 fell 1.4 percent amid across the board selling. The German DAX tumbled 1.7 percent, France's CAC 40 index shed 1.6 percent and the U.K.'s FTSE 100 dropped 0.6 percent.

For comments and feedback contact: editorial@rttnews.com

Business News

Follow RTT