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European Shares Slide On Inflation Concerns

us pre market 053119 22feb21 lt

European shares fell on Monday on concerns that accelerated vaccine rollouts and aggressive fiscal stimulus will spur a faster economic revival and stoke inflation.

The dollar slid to multi-year lows against sterling and rival currencies, while benchmark U.S. Treasury yields hit a near one-year high as the reflation trade emerged as a key theme.

The pan European Stoxx 600 dropped 1.2 percent to 410.12 after gaining half a percent on Friday.

The German DAX dripped 1.1 percent. German business confidence strengthened in February, survey results from ifo Institute showed earlier today.

The business confidence index rose to 92.4 from 90.3 in the previous month. This was better than the economists' forecast of 90.5.

France's CAC 40 index was down about 1 percent. The country is to increase self-isolation times for Covid-positive cases from seven to 10 days due to uncertainty over the new variants, the health minister announced over the weekend.

The U.K.'s FTSE 100 was down 0.6 percent as investors await a roadmap out of lockdown set to be announced by Prime Minister Boris Johnson in a speech to Parliament later today.

In corporate news, Continental AG shares edged up slightly. The German automotive parts maker suspended annual dividend after reporting a net loss for 2020.

French car parts maker Faurecia gave up 2.4 percent. The company said it is targeting sales close to 25 billion euros ($30.29 billion) and an operating margin above 8 percent of sales by 2025.

Miners were broadly higher, with Glencore rising nearly 1 percent after copper prices climbed as much as 4 percent.

All eyes will be on European Central Bank President Christine Lagarde's speech on stability, economic co-ordination and governance in the EU later in the day.

Federal Reserve Chairman Jerome Powell will deliver his semi-annual testimony on the economy before the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday.

Powell is likely to reiterate that the central bank will maintain an easy monetary policy to support the economy recovering from the pandemic.

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