European Stocks Recover After Bond Yields Hit Multi-Year Highs
European stocks rose Friday following a sharp selloff driven by surging government bond yields and concerns over rising interest rates.
The pan-European STOXX 600 rose 0.4% to 629.18 points on Friday, recovering from a Thursday selloff that drove the index to its lowest level in more than three months. The decline was triggered by global government bond yields reaching multi-year highs, leading investors to worry that rising interest rates will damage the broader economy.
European banking stocks are experiencing their worst weekly performance since April. Among the losses, Germany's Commerzbank fell 2% after RBC downgraded the bank from outperform to sector perform. In the consumer sector, Puma shares declined 1.2% after Nike projected a steep drop in full-year revenue, citing weak demand in China.
Market participants are now awaiting euro zone flash inflation data and the U.S. nonfarm payrolls report. These indicators will help investors gauge the future trajectory of monetary policy and the likelihood of further interest rate hikes.
