European stocks lower
Friday, 22 June 2007
LONDON, June 21 (AFP): European shares lost ground Thursday as concerns about bond yields resurfaced, with exchange M&A in focus after the London Stock Exchange said it's considering merging with Borsa Italiana.
The pan-European Dow Jones Stoxx 600 index lost 0.7 per cent at 394.90 at midday, with mobile-phone maker Nokia falling 2.7 per cent after a downgrade at Goldman Sachs. Interest rate-sensitive construction companies such as Lafargewere also on the decline.
US stocks closed sharply lower Wednesday, with the Dow Jones Industrial Average suffering a nearly 150-point loss, after rising bond yields dented enthusiasm for stocks once again. In early June, equity markets recorded sharp losses for about a week as bond yields rose.
"It was premature to think that a week was sufficient time to digest the bond market sell-off in full. Higher bond yields are here to stay and rising bond yield trends hurt equity markets," said Gerhard Schwarz, head of global equity strategy at HVB in Munich.
Bond markets were wary Wednesday amid reports that banks are selling off assets from two Bear Stearns hedge funds that have been battered by turmoil in the sub-prime mortgage market.
The pan-European Dow Jones Stoxx 600 index lost 0.7 per cent at 394.90 at midday, with mobile-phone maker Nokia falling 2.7 per cent after a downgrade at Goldman Sachs. Interest rate-sensitive construction companies such as Lafargewere also on the decline.
US stocks closed sharply lower Wednesday, with the Dow Jones Industrial Average suffering a nearly 150-point loss, after rising bond yields dented enthusiasm for stocks once again. In early June, equity markets recorded sharp losses for about a week as bond yields rose.
"It was premature to think that a week was sufficient time to digest the bond market sell-off in full. Higher bond yields are here to stay and rising bond yield trends hurt equity markets," said Gerhard Schwarz, head of global equity strategy at HVB in Munich.
Bond markets were wary Wednesday amid reports that banks are selling off assets from two Bear Stearns hedge funds that have been battered by turmoil in the sub-prime mortgage market.