European shares retreat on rising bond yields

Rising bond yields dragged European stocks lower on Friday, although major bourses were set for weekly gains as stimulus and vaccination programmes spurred hopes of a solid economic recovery.

DUBLIN

The Dublin market closed virtually unchanged versus Thursday at 7976.35.

Banks were in focus, with Bank of Ireland up 2.5 per cent to €3.99 and AIB gaining 3.6 per cent to finish at €2.15.

House builders were also of interest to investors with Cairn Homes trading 1.9 per cent higher at €1.09 and Glenveagh up 1.7 per cent at €0.90.

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It was a mixed performance from food stocks, with Glanbia up 1.6 per cent to €11.36, and Kerry down 1.4 per cent to €101.60.

Other movers in Dublin included Kingspan, down 1.9 per cent, and Ryanair, which closed 1.5 per cent lower.

LONDON

London’s Ftse 100 reversed course on Friday and ended a strong week on an upbeat note, with banks and consumer staples leading gains, while data showed the British economy shrank by less than feared in January.

The blue-chip Ftse 100 index ended 0.4 per cent higher, rising for the second consecutive week as investors bet on a gradual easing of coronavirus restrictions and a steady vaccination programme to eventually spur growth.

Bank stocks, including Barclays, HSBC, Lloyds Banking Group and Standard Chartered, gained 0.8-3.6 per cent, tracking higher US Treasury yields.

Luxury group Burberry rose 6.9 per cent to the top of the blue-chip index after recording a strong rebound in sales since December, which it expected to result in a profit for the year to March 27th – beating market forecasts.

AstraZeneca fell 0.9 per cent, after scaling back its planned deliveries of Covid-19 vaccines to the European Union in the first quarter to about 30 million doses, a third of its contractual obligations and a 25 per cent drop from pledges made last month.

EUROPE

The pan-European Stoxx 600 index fell 0.3 per cent after a four-session winning streak drove it to pre-pandemic highs a day earlier. The index posted weekly gains of 3.5 per cent, its best performance since November.

Dutch tech investor Prosus, which holds a third of Chinese tech giant Tencent, dropped 6.7 per cent as China's market regulator fined 12 companies, including Tencent, related to deals that demonstrated illegal monopolistic behaviours.

German car maker Daimler declined by 1.9 per cent after French rival Renault sold its entire stake in the company at a discount. BMW fell 1.3 per cent after saying its operating profit for 2020 fell due to the Covid-19 pandemic.

Italy's Brunello Cucinelli surged 8.2 per cent after the luxury goods maker raised its sales forecast for the year on expectations that the end of the pandemic was near.

WALL STREET

The S&P 500 slipped in early trading on Friday after hitting an all-time high in the previous session, as a spike in US bond yields revived inflation worries and dented appetite for high-growth stocks.

The tech-heavy Nasdaq tumbled 1.3 per cent after rebounding more than 6 per cent over the past three sessions, while the blue-chip Dow hit its fifth consecutive record high.

Wall Street’s main indexes were set for their best week in six after one of the largest US fiscal stimulus Bills was signed into law and data reinforced views that the economy was on the path to a recovery.

The yield-sensitive group of Facebook, Apple, Amazon, Netflix, Google parent Alphabet, Tesla and Microsoft were down 1.2-3 per cent.

Ulta Beauty slumped about 8 per cent after the cosmetics retailer forecast annual revenue below estimates, as demand for make-up products came under pressure due to extended work-from-home policies.

US-listed shares of China-based JD.com dropped nearly 6.7 per cent after three sources said it was in talks to buy part or all of a stake in brokerage Sinolink Securities worth at least $1.5 billion.