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European Stocks Mixed; Tech Stocks Weaken as Tesco Outperforms

Stock Markets Jan 05, 2022 09:40
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By Peter Nurse 

Investing.com - European stock markets traded in subdued fashion Wednesday, helped by continued recovery confidence but with higher U.S. Treasury yields weighing on the tech sector. 

At 3:55 AM ET (0855 GMT), the DAX in Germany traded 0.2% higher, while the CAC 40 in France and the U.K.’s FTSE 100 were largely flat. 

European indexes have started the new year on the front foot, with the pan-European STOXX 600 index climbing to an all-time high as hopes for an early end to the pandemic bring cyclical and value stocks back into vogue.

However, benchmark U.S. 10-year Treasury yields touched a six-week high on Tuesday, five-year rates hit a pandemic-era high, and two-year note yields hit their highest since March 2020 on Monday. That's weighing on tech companies, particularly those whose payoff is further out into the future.  For example, Dutch-listed Prosus (OTC:PROSF) stock fell 3.3%. 

On the data calendar, French consumer confidence unexpectedly rose in December to reach its highest level since September, while the final composite PMI for the Eurozone was revised down slightly to 53.3 in December, from an initial estimate of 53.4.

Elsewhere, Tesco (OTC:TSCDY) stock rose 0.3% after data from market researcher Kantar showed Britain's biggest supermarket group outperformed its major rivals in the key Christmas period, achieving its highest grocery market share since January 2018.

Repsol (OTC:REPYY) stock rose 1.2% after the Spanish energy giant bought shale oil and gas assets from U.S. firm Rockdale Marcellus for $222 million, while Amundi (PA:AMUN) stock rose 0.8% after the French asset management company announced the completion of its acquisition of of Lyxor from Societe Generale (OTC:SCGLY) creating the second largest ETF business in Europe.

Later Wednesday, investors looking for clues as to when the Federal Reserve will first raise interest rates will study the minutes of the central bank’s meeting last month.

Oil prices stabilized Wednesday as traders digested a mixed report for U.S. petroleum stockpiles at the same time as a group of top producers gradually lifted global output.

Data from the American Petroleum Institute, released on Tuesday, showed a draw of 6.4 million barrels of crude for the week ended Dec. 31, significantly more than expected, while gasoline inventories rose by a hefty 7.1 million barrels.

U.S. crude oil supply data from the U.S. Energy Information Administration are due later Wednesday.

Earlier Tuesday, the Organization of the Petroleum Exporting Countries and allies, a group called OPEC+, decided to stick to its plan of increasing output by 400,000 barrels per day in February, suggesting confidence that overall demand wouldn’t be hit too badly by the fresh Covid outbreak.

By 3:55 AM ET, U.S. crude futures traded 0.4% lower at $76.66 a barrel, while the Brent contract fell 0.3% to $79.73. 

Additionally, gold futures rose 0.2% to $1,817.20/oz, while EUR/USD traded 0.2% higher at 1.1302.

European Stocks Mixed; Tech Stocks Weaken as Tesco Outperforms
 

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