European stocks slide on investor concerns
Rising U.S. bond yields put European equities under pressure again on Friday after Federal Reserve Chair Jerome Powell’s remarks failed to soothe investor concerns about a recent surge in borrowing costs.
The pan-European STOXX 600 fell 0.7%, with shares of travel, media, and financial services companies leading the declines.
While Powell said the rise in yields was “notable”, he did not consider it a “disorderly” move, or one that pushed long-term rates so high the Fed might have to intervene in markets more forcefully to bring them down. The comments fuelled a sell-off on Wall Street on Thursday, pushing the tech-heavy Nasdaq to erase its yearly gains. European tech shares also fell 0.5%, on course for their second weekly loss.
Data showed orders for German-made goods rose by twice as much as expected in January as robust foreign demand more than offset domestic weakness.
A late rally in Chinese shares on Friday helped pull Asian stocks off one-month lows as investors picked bargains while attention shifted to U.S. non-farm payrolls due later in the day.
In Asia, Australian stocks dropped more than 0.7%, Japan’s Nikkei share average shed 0.2%, after earlier being down more than 1%, and shares in Seoul fell 0.4%. Chinese shares, which had opened in the red, reversed losses with the bluechip CSI300 index up 0.3%. That left MSCI’s broadest index of Asia-Pacific shares outside of Japan down 0.4% at 694.87 but still above the day’s low of 684.52, a level not seen since the 1 February.
Energy markets were not spared the volatility either, with oil prices adding to big gains overnight after the Organization of Petroleum Exporting Countries and its allies agreed to mostly maintain their supply cuts in April as they await a more solid recovery in demand from the COVID-19 pandemic.
Oil prices extended gains on Friday after zooming higher overnight. U.S. crude futures climbed 82 cents to $64.65, holding just below a 13-month high hit on Thursday. Brent crude rose 88 cents to $67.62 a barrel.