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European Shares Decline On Fed Rate Hike Bets

european market 021219 18jan22 lt

European stocks fell on Tuesday as a rise in two-year U.S. Treasury yields reflected expectations for a Fed policy rate hike as soon as March.

Treasuries dropped across the curve, pushing two-year and 10-year yields up to levels last seen before the pandemic roiled markets.

The pan European Stoxx 600 fell 1.3 percent to 478.46 after rising 0.7 percent on Monday. The German DAX and France's CAC 40 both dropped around 1.2 percent, while the U.K.'s FTSE 100 was down about 1 percent.

Molecular Partners AG rallied 2.4 percent. The clinical-stage biotech company developing DARPin therapeutics said it has entered into a license agreement with Novartis AG, under which the Swiss drug major will in-license global rights to ensovibep from Molecular Partners. Novartis shares were down 1.3 percent.

Automakers Renault, BMW, Daimler and Volkswagen fell 1-2 percent as industry data showed new car registrations in the EU dropped 22.8 percent year-on-year to 795,295 units, after a 20.5 percent slump in November.

Nordex AG fell 1.5 percent. The company said that in line with its previous projections, it has recorded a rise in order intake for wind turbines in the year 2021, amidst a strong demand from across the globe.

Vivendi dropped 1.1 percent in Paris. The media conglomerate said that it has decided to invest in digital communication group Progressif Media.

Food caterer Sodexo advanced 1.6 percent. Reuters reported Bain Capital was looking to bid for a stake in its benefits and rewards services unit.

Miners declined in London, with Anglo American and Antofagasta both falling over 1 percent.

Elementis jumped 4 percent. The specialty chemicals company said it delivered a good fourth quarter performance, with double-digit year-on-year underlying revenue growth, agile supply chain management and self-help actions.

Genel Energy rallied 3.2 percent. The company, engaged in oil and gas exploration and production activities, forecast its free cash flow to more than double in 2022.

In economic releases, the U.K. unemployment rate dropped to 4.1 percent in three months to November, data from the Office for National Statistics showed. The rate was forecast to remain unchanged at 4.2 percent.

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