Europe close: Shares slip at month's start as bond yields grind higher
Early gains for European shares at the start of March evaporated as longer-term government bond yields continued to grind higher on either side of the Atlantic.
“While European and US futures came into the day looking stronger thanks to Chinese factory data, they have found the going harder throughout the rest of the session," said IG chief market analyst Chris Beauchamp.
"After a miserable second half of February, hopes were high that new month flows might help stocks find their footing, even as worries about the path of interest rates remained. US stocks have steadied after a weaker open, though we are yet to see an enthusiastic wave of buying.”
The pan-European Stoxx 600 index was off by 0.74% at 457.68, with the German Dax off by 0.39% to 15,305.02 alongside, while Spain's Ibex 35 gave back 0.76% to 9,322.90.
In parallel, the yield on the benchmark 10-year German Bund was six basis points higher to 2.713% with the single currency putting on 0.87% versus the US dollar to 1.0660.
Overnight, Caixin's general manufacturing PMI rose to 51.6, beating forecasts of 50.2, and up from 49.2 in January. A level above 50 indicates expansion.
In equity news, shares in Allfunds Group tanked by 13.1% after Euronext pulled its €5.5bn offer for the fund distribution company, which had called the terms of the exchange operator's bid inadequate.
BNP Paribas dropped on news that Belgium was preparing the sale of a third of its 7.8% equity stake the eurozone's biggest bank.
UK housebuilders tumbled on a Persimmon profit warning after it was knocked by the spike in mortgage rates. Taylor Wimpey, Vistry, Bellway and Barratt also fell on the news. Sentiment wasn’t helped by the latest survey from mortgage lender Nationwide, which revealed house prices fell by 1.1% year-on-year in February, the first annual decline since June 2020
Mining engineer Weir surged on the back of a strong rise in annual earnings.
Nivea maker Beiersdorf shares dipped as the company forecast organic sales growth to slow after a bumper 2022, while Just Eat Takeaway.com slipped despite swinging to a small 2022 core profit.
Logistics group Kuehne und Nagel also made sharp gains despite reporting a 43% drop in fourth-quarter operating profit and said geopolitical and inflationary challenges would persist.