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European Shares Retreat As US Bond Yields Surge

us pre market 053119 17feb21 lt

European shares fell from near one-year highs on Wednesday as concerns about inflation tempered optimism over swifter economic recovery.

The pan European Stoxx 600 dropped 0.4 percent to 417.41 after ending little changed with a negative bias on Tuesday.

The German DAX fell 0.7 percent, France's CAC 40 index slipped 0.2 percent and the U.K.'s FTSE 100 was down 0.3 percent.

Rio Tinto shares surged 4.1 percent. The miner rewarded investors with the biggest dividend in its history after reporting its biggest annual profit in nine years.

British American Tobacco slumped 5.5 percent. The cigarette manufacturing company said it expects a continuing impact from the coronavirus pandemic this year.

Swiss food and beverage giant Nestle SA was moving lower after announcing its agreement to sell Nestlé Waters North America to One Rock Capital Partners LLC in partnership with Metropoulos & Co. for $4.3 billion.

Dutch supermarkets and eCommerce company Ahold Delhaize N.V. fell nearly 3 percent after it swung to a net loss in the fourth quarter of 2020.

Paints and chemicals maker Akzo Nobel N.V. rose over 1 percent after its fourth-quarter earnings beat market view.

Beiersdorf AG shares slumped 5.5 percent. The maker of Nivea, Eucerin and La Prairie products said that it did not expect a recovery in profitability in 2021.

French luxury goods company Kering, whose portfolio of brands includes Saint Laurent and Balenciaga, plunged 8 percent after it suffered a sales slowdown during the key Christmas shopping season.

Banks were gaining ground on expectations that they would benefit from higher yields.

U.S. Treasury yields held near their highest in a year as vaccine rollouts and stimulus measures spurred bets of a likely spike in inflation.

In economic releases, U.K. consumer price inflation rose slightly to 0.7 percent from 0.6 percent in December, data from the Office for National Statistics showed. The rate was forecast to remain stable at 0.6 percent.

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