European stocks edge down as bond rout continues

Automakers, retailers and banks were the biggest sectoral decliners in Europe, falling between 0.7% and 1%, but utilities rebounded from recent sharp losses. Global equity markets have come under selling pressure recently as hawkish views from central bank policymakers and strong U.S. economic data boosted bets that interest rates will stay elevated, sending bond yields higher.

European stocks slipped on Wednesday, hurt by a relentless rally in U.S. and European bond yields as investors came to terms with a higher-for-longer interest rate regime.

The pan-European STOXX 600 index edged down 0.1%, hovering near a six-month low as of 0817 GMT. Automakers, retailers and banks were the biggest sectoral decliners in Europe, falling between 0.7% and 1%, but utilities rebounded from recent sharp losses.

Global equity markets have come under selling pressure recently as hawkish views from central bank policymakers and strong U.S. economic data boosted bets that interest rates will stay elevated, sending bond yields higher. The German DAX dropped 0.3% to a six-month low as the benchmark 10-year German bund yield breached 3% for the first time since 2011.

In the United States, yields for five-year maturities and beyond struck highs not seen in 16 years as markets braced for strong U.S. jobs numbers to herald higher rates. Data on Tuesday

showed U.S. job openings unexpectedly increased in August, pointing to a still-tight labour market.

"This fresh bout of anxiety has been prompted by new jobs data in the U.S. indicating that vacancies unexpectedly jumped in August," said Susannah Streeter, head of money and markets, Hargreaves Lansdown. "This has added to worries about labour market tightness, and led to expectations that not only will there be another interest rate hike to try and dampen demand, but that any prospect for rate cuts has been pushed further."

The odds of the Federal Reserve hiking interest rates by 25 basis points next month stand at 30%, while the European Central Bank is widely expected to hold rates later this month. A survey

showed the euro zone economy probably shrank last quarter, with demand falling in September at the fastest pace in almost three years, as consumers reined in spending.

Among single stocks, Novartis rose 2.5% after the Swiss drugmaker said it has completed the spin-off of its generics and biosimilars business Sandoz. Sandoz, meanwhile, opened at 24 Swiss francs in its first day of trading, and was last seen at 23 Swiss francs.

Tesco gained 2.5% after Britain's biggest supermarket upgraded its annual profit guidance as food inflation eased and shoppers snapped up both its low price offers and its premium "Finest" ranges. Fund distribution company Allfunds soared as much as 15%, with traders attributing the rise to a media report the firm has enlisted banks to explore its sale for more than 5 billion euros.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)