World Economy

World Stocks Stumble as US Yields Near 3% Barrier

World Stocks Stumble as US Yields Near 3% BarrierWorld Stocks Stumble as US Yields Near 3% Barrier

World stocks slipped on Monday as investors braced for a blizzard of earnings from the world’s largest firms, while keeping a wary eye on US bond yields as they approach peaks that have triggered market spasms in the past.

The yield on 10-year US Treasuries hit its highest level since January 2014 at 2.979% in early European trade, as the spread over the German equivalent briefly touched its widest level in 29 years, Reuters reported.

Traders were also getting a global round of economic surveys that should show if economic softness in the first quarter was just a passing phase linked to wintery weather and the Lunar New Year holidays.

European equity benchmarks were fractionally lower on Monday as consumer goods companies edged lower and a key measure of business activity across the region held steady.

In equities, consumer goods company Reckitt Benckiser Group (RB.L) was leading the decliners on London’s FTSE 100 Index, 2.3% lower, followed by electricity distribution company National Grid, down by 2.2% and WPP, an advertising and public relations company, 2.1% lower. Bunzl, a distribution and outsourcing group, was down by 1.7%.

On Frankfurt’s DAX, Fresenius Medical Care,a kidney dialysis company, was 3.7% lower, followed by Henkel vz, a chemical and consumer goods company, down by 1.3% and Vonovia, a residential property company, 1.2% lower. Beiersdorf, a skin care company, was 0.8% lower.

And, on Paris’ CAC-40, Danone, a food products company, down by 1.5%, Publicis, an advertising and public relations company, 1.2% lower and Legrand, an industrial group, down by 1.1%.

The pan-European Stoxx 600 Index was 0.14% lower, London’s FTSE 100 Index was down by 0.02%, Frankfurt’s DAX was 0.23% lower and Paris’ CAC-40 was 0.16% lower at the time of writing.

Stocks lost ground on the Tokyo Stock Exchange, weighed down by US equities’ drop late last week. The 225-issue Nikkei average fell 74.20 points, or 0.33%, to end at 22,088.04. On Friday, it dropped 28.94 points. The Topix index of all first-section issues closed down 0.34 point, or 0.02%, at 1,750.79, declining for the first time in four market days. The index edged up 0.95 point on Friday.

Indian shares ended higher for a third consecutive session on Monday, driven by gains in IT and financial stocks, with software services exporter Tata Consultancy Services crossing $100 billion in market capitalization. The benchmark BSE index closed up 0.1% at 34,450.77, while the broader NSE index ended 0.2% higher at 10,584.70.

In Southeast Asia, Vietnam stocks plummeted nearly 4%, extending a market rout after a near 7% decline over the last two weeks, while most other stock markets in the region slipped as US bond yields rose to a multi-year peak.

Most other Southeast Asian stock markets slipped. The Thai index shed 0.6% as energy and financial stocks fell. Oil and gas company PTT Pcl closed 2.7% lower while financial services provider, Siam Commercial Bank PCl, dropped 1.8%.

Philippine shares ended marginally lower as financial stocks weighed on the benchmark. The Indonesian stock market slipped 0.47%, dragged down by consumer stocks, healthcare and financials.  

Singapore shares were the sole gainers in the region, erasing earlier losses in the session to close 0.17% higher. Singapore’s headline consumer price index rose 0.2% in March from a year earlier, compared with a 0.5% growth in February, data showed on Monday.



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