NEW YORK (US) – European stocks benchmark saw a drip on Tuesday after confirming its strongest session in four months a day earlier as weaker commodity prices had a heavy toll on mining and energy stocks.
The pan-regional STOXX 600 index fell 0.2%, on Asian markets’ trail into the red after China’s top banking and insurance regulator warned about the risk of asset bubbles in foreign markets.
Oil majors Royal Dutch Shell, BP and Total came down between 1.3% and 2.4% as crude prices dropped on worries about a decrease in demand in China.
The oil and gas sector fell 1.5%, while miners came down to 0.4%.
European shares have seen a retreat from February peak with a rise in bond yields over fear of investors that a potential rise in inflation propelled by global stimulus measures could force central banks to make tighter monetary policies.
Lewis Grant, a senior portfolio manager at Federated Hermes in London, said, “When we look at Western markets, we are not anticipating rate moves, which is why I’m comfortable with the rise in yields.”
“We need to acknowledge that yields move because of optimism over re-opening, and that is a good thing for equities.”
As there were gains in shares of consumer companies such as Nestle, Unilever and Reckitt Benckiser, it helped put restraints on losses in Europe.
Swiss chocolate maker Lindt & Spruengli jumped 3.3% after saying that it aimed for 6% to 8% organic sales growth this year, which was triggered by pent-up demand after the pandemic affected its business.
Britain’s third-largest homebuilder Taylor Wimpey rose 2.3% after it said the 2021 selling season has begun on a positive note and that it resumed dividend payment as per discussions.