Australia markets open in 6 hours 39 minutes

    +28.60 (+0.41%)

    -0.0006 (-0.08%)
  • ASX 200

    +28.80 (+0.43%)
  • OIL

    -0.59 (-0.89%)
  • GOLD

    -19.10 (-1.12%)

    -221.28 (-0.33%)
  • CMC Crypto 200

    +5.48 (+0.53%)

Inflation fears weigh on US, European stocks

·3-min read
Investors are growing more concerned about high stock prices and the potential for inflation in general

US and European stocks mostly fell Monday, with tech stocks taking the biggest hit amid growing concerns that borrowing rates will creep higher as the US economy -- and prices -- recover

Yields on the 10-year US Treasury note pushed higher, rattling investors fearful it signals a similar lurch in interest rates. The advance comes in anticipation the US Congress will soon pass President Joe Biden's $1.9 trillion stimulus package.

On Wall Street, the tech-rich Nasdaq suffered the biggest hit, losing 2.5 percent behind weakness in Apple, Tesla and other tech names.

Peter Cardillo of Spartan Capital noted that rising lending rates hit tech companies more since they rely more heavily on financing.

"Generally, when yields go up, interest rates go up," Cardillo told AFP.

"But this time around, it may not be the case because the Fed keeps saying they're not going to change their rate policy for some time to come."

In fact, Federal Reserve Chair Jerome Powell has repeated assurances that the US central bank has no plans to raise the benchmark interest rate until employment has recovered and inflation begins to rise.

He will have another opportunity to address the issues during two days of testimony in Congress on Tuesday and Wednesday.

European equities also were in retreat Monday, despite improving coronavirus dynamics in the region.

British Prime Minister Boris Johnson laid out a four-step plan to ease Covid-19 restrictions Monday, and expressed hope that life could get back to normal by the end of June.

In Germany, a survey showed that business confidence has improved this month, with the robust industrial sector of Europe's top economy withstanding the impact of pandemic restrictions.

The Ifo institute's monthly confidence barometer, based on a survey of 9,000 companies, climbed to 92.4 points from 90.3 points in January, when tougher measures to fight the virus were introduced.

But European stock markets "have kicked off the week on a somewhat unstable footing, with the fears over rising inflation and (US) Treasury yields once again dampening sentiment on a day that had promised to be dominated by reopening hopes," noted Joshua Mahony, senior market analyst at the IG trading group.

- Key figures around 2145 GMT -

New York - Dow: UP 0.1 percent at 31,521.69 (close)

New York - S&P 500: DOWN 0.8 percent at 3,876.50 (close)

New York - Nasdaq: DOWN 2.5 percent at 13,533.05 (close)

London - FTSE 100: DOWN 0.2 percent at 6,612.24 (close)

Frankfurt - DAX 30: DOWN 0.3 percent at 13,950.04 (close)

Paris - CAC 40: DOWN 0.1 percent at 5,767.44 (close)

EURO STOXX 50: DOWN 0.4 percent at 3,699.85 (close)

Tokyo - Nikkei 225: UP 0.5 percent at 30,156.03 (close)

Hong Kong - Hang Seng: DOWN 1.1 percent at 30,319.83 (close)

Shanghai - Composite: DOWN 1.5 percent at 3,642.44 (close)

Pound/dollar: UP at $1.4064 from $1.4016 at 2200 GMT on Friday

Euro/dollar: UP at $1.2161 from $1.2119

Euro/pound: DOWN at 86.44 pence from 86.47 pence

Dollar/yen: DOWN at 105.07 yen from 105.45 yen

Brent North Sea crude: UP 3.7 percent at $65.24 per barrel

West Texas Intermediate: UP 3.8 percent at $61.49 per barrel