LONDON: European stocks fell last Friday, as a fresh rise in oil prices fanned inflation fears and worsened a global bond selloff.
The Stoxx 600 was down 1.6% by 1.30pm in London, set for its worst day since late March. With bond yields from the United States to Japan hitting multi-year highs, rate-sensitive sectors like banks, utilities and real estate were among the biggest laggards.
Tech also underperformed, as ASML Holding NV and Infineon Technologies AG mirrored the hefty declines in Asian peers amid a slide in Nasdaq 100 futures.
Energy stocks were a bright spot, however, while traders also sought out defensive sectors including healthcare and consumer staples.
Brent crude rose above US$109 a barrel earlier in the day after President Donald Trump told Fox News the United States doesn’t need the Strait of Hormuz open.
Markets are also disappointed that Trump’s summit with Chinese leader Xi Jinping failed to yield any commitment from Beijing toward ending the Iran war.
“With a background of bond markets looking unsettled, with the problem of inflation, with the Strait of Hormuz not having a solution out of that Summit, I think there will definitely be some volatility to come,” Paul Skinner, investment director at Wellington Management, told Bloomberg TV. — Bloomberg
