Higher yields weigh on European shares, luxury stocks enter bear market territory
By Bansari Mayur Kamdar and Sruthi Shankar
(Reuters) -European shares fell for a fourth day on Tuesday, with rate-sensitive technology and real estate stocks pressured by surging bond yields, while fears over a sputtering Chinese economy sent a gauge of luxury stocks into bear market territory.
The pan-European STOXX 600 shed 0.6% to close at a more than 11-week low.
Technology stocks, whose valuations come under pressure as yields rise, slid 2.0%, while real estate stocks eased 1.9% on expectations interest rates in the United States and Europe will not fall soon.
Germany's 10-year government bond yield, the euro area's benchmark, edged up to 2.796%, having briefly hit a 12-year high of 2.813% in early trade. The benchmark U.S. 10-year Treasury note yield hit 4.5660% earlier, its highest since October 2007. [GVD/EUR] [US/]
«If the U.S. 10-year yield moves to 4.75% we will most likely begin seeing widening cracks in equities as the prevailing narrative of falling inflation collapses,» strategists at Saxo Bank said.
Meanwhile, a gauge of top European luxury goods stocks fell as much as 20.05% from a record peak in May, a drop that would confirm the index is technically in bear-market territory.
European luxury giants LVMH and Richemont weakened 1.4% and 3.0% as investors remain concerned about a disappointing post-pandemic recovery in China and faltering sales in the United States.
Equity markets across the globe have come under pressure in recent days as the Federal Reserve and European Central Bank policymakers signalled the central banks are nearly done hiking interest rates but will keep them higher for longer.
Norwegian hydrogen company Nel tumbled 11.0% to the bottom of the STOXX 600 due to weak sentiment among
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