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CAC 40 Slides On Rate Rise Fears

French stocks fell on Friday as a surge in government bond yields stoked fears of inflation.

Markets were hedging the risk of an earlier rate hike from the Federal Reserve, despite officials signaling earlier in the week that they don't expect to raise interest rates.

Stronger-than-expected U.S. economic data released overnight also added to the fears that the Fed could withdraw stimulus sooner than anticipated.

The benchmark CAC 40 index dropped 30 points, or half a percent, to 5,754 after closing 0.2 percent lower the previous day.

Natural gas and electricity supplier Engie fell 1.5 percent after it slipped to a net loss in FY20. The company reported that its fiscal 2020 net loss Group share was 1.5 billion euros, compared to prior year's profit of 1 billion euros.

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