Markets flounder as US bond yields rise

The Frankfurt stock exchange was spooked the most, though European markets as a whole were in the red

London (AFP) – World stock markets slid Wednesday on profit-taking, as investors fretted over rising US Treasury yields and speculation 2018 will see four interest rate rises.

New York equities tumbled once more a day after after the yield on the 10-year US Treasury bond hit 3.0 percent for the first time in more than four years as the Dow dipped in early trading.

“The European markets looked increasingly ugly as Wednesday went on, investors fearing what could happen after the US open,” said Spreadex analyst Connor Campbell.

Frankfurt was spooked the most, with the benchmark DAX index shipping more than 1.6 percent in value before recovering slightly while London and Paris each slid by more than half of one percent.

“European stock markets are in the red … as traders lock in their profits,” added CMC Markets analyst David Madden.

Charles Schwab offered one positive note amid the gloom in finding that “the pressure is being alleviated somewhat from upbeat earnings reports from Dow member Boeing and Twitter” after a surge in first-quarter profits for the former and a second consecutive quarterly profit for the latter.

But those results could not hold the line in early trading on Wall Street, as the Dow, seeking to end a five-day losing streak, slipped 0.7 percent.

Prior to the US opening bell Mike van Dulken, head of research at Accendo Markets, noted “sentiment dented by US weakness derived from continued worries about higher US bond yields, and thus borrowing costs, coupled with some heavyweight corporate disappointments.”

Lukman Otunuga, research analyst at FXTM, agreed in finding that “negative momentum from Asian markets and growing caution” had punished stocks.

 – Comcast formalises Sky bid – 

London losses were tempered somewhat after US media giant Comcast confirmed a £22-billion ($31-billion, 25-billion-euro) firm offer for Sky.

The news, which threatened to derail media mogul Rupert Murdoch’s attempt to take full control of Sky, sent shares in the British pay-TV giant soaring more than four percent.

In response to the Comcast news, Sky announced it had withdrawn its support for 21st Century Fox’s £11.4 billion bid for the 61 percent of the UK broadcaster that it does not already own.

Asian markets earlier reversed tack after earlier losses on Wall Street.

 – Key figures around 1345 GMT – 

New York – Dow: DOWN 0.7 percent at 23,854.08 

London – FTSE 100: DOWN 0.8 percent at 7,364.48 points

Frankfurt – DAX 30: DOWN 1.2 percent at 12,401.53

Paris – CAC 40: DOWN 0.6 percent at 5,413.14

EURO STOXX 50: DOWN 1.0 percent at 3,482.61 

Tokyo – Nikkei 225: DOWN 0.3 percent at 22,215.32 (close)

Hong Kong – Hang Seng: DOWN 1.0 percent at 30,328.15 (close)

Shanghai – Composite: DOWN 0.4 percent at 3,117.97 (close)

Euro/dollar: DOWN at $1.2183 from $1.2233 at 2100 GMT

Dollar/yen: UP at 109.20 yen from 108.82

Pound/dollar: DOWN at $1.3944 from $1.3978

Oil – Brent North Sea: DOWN 29 cents at $73.57 per barrel

Oil – West Texas Intermediate: DOWN five cents at $67.65