European shares are trading lower Wednesday, as investors retreat from the stock markets and show interest in the bond markets and oil. Bond yields are on the up, while the oil price continues its upward move, attracting investors away from the stock indices.
By 1325 BST, the EUROSTOXX 600 was down 0.49%, while the EUROSTOXX 50 was 0.41% lower. The regional bourses were also weaker. The German DAX was off 0.89%, the French CAC fell 0.42%, while the Spanish IBEX was only a little in the red, down 0.01%.
Bond yields rise
Bond yields have risen overnight, following a surprise announcement from Japan’s Central Bank that it was reducing the amount of bonds it buys. That move sent bond prices lower and the yields they produce, higher.
Analysts are divided as to whether or not the move will last.
Some analysts suggest the increase in bond-yields could be a one-off move to a surprise BOJ change. However, others have stated this could signal the end of the decades-long stock market bull run.
While the increase in bond yields saw investors pullback from the stock markets in general, it also helped boost banks share prices:
- HSBC shares rose 3.28% to £791.40.
- RBS shares gained 4.24% to trade at £292.40.
- Banco Sabadell shares were 2.26% higher at €1.83.
- Banca Santander shares rose 1.95% to €5.81.
- Deutsche Bank shares were 1.92% in the green at €15.40.
However, the overall tone of European stock indices was lower, which means there were also plenty of stock fallers across the markets, Wednesday. They included:
- Tele2 shares declined 7.11%.
- After strong gains Tuesday, Altice shares slid 5.96% to €5.92.
- IG Group shares fell 3.08% to £755.00.
- Taylor Wimpey shares were 4.40% in the red at £199.70.