Europe stocks retreat after three-day rise as rising yields, oil dent sentiment
VGK•European shares closed 1% lower after three sessions of gains as higher oil prices and bond yields weighed on sentiment. Pennon fell 20% after announcing a £550 million rights issue and dividend cut.
1. Shares fall broadly
The pan-European STOXX 600 ended 1% lower on Wednesday, giving up most of its gains from the previous three sessions. Banks fell 3.3%, while technology stocks eased from record highs.
2. Yields and oil rise
Bond yields in the United States and Europe edged higher. Germany’s 10-year government bond yield reached 3.5279% before ending little changed, while Brent crude rose 0.5%. Investors were also watching Federal Reserve meeting minutes and remarks from policymakers for clues on interest rates.
3. Company and earnings news
Pennon Group slid 20% after launching a fully underwritten £550 million rights issue and lowering its dividend to address operational problems. BE Semiconductor Industries fell 8.5% after UBS downgraded the stock to “sell,” citing risks to adoption of hybrid bonding. LSEG estimates STOXX 600 third-quarter earnings will rise 19.4% year over year, or 9.9% excluding energy.
