LONDON — European stocks retreated on Tuesday as global investors monitored a spike in U.S. bond yields and Chinese growth concerns.
The pan-European Stoxx 600 fell 1.2% in early trade, with tech stocks dropping 3.2% to lead losses while oil and gas stocks added 0.8%.
Stocks in Asia-Pacific mostly declined in Tuesday trade, as various firms downgraded China's GDP forecasts amid a power crunch. Goldman Sachs on Tuesday slashed its China GDP growth expectations to 7.8%, down from the 8.2% previously forecast. Nomura also expected China's GDP to grow by 7.7% this year, down from a previous forecast of 8.2%.
Meanwhile, U.S. stock futures fell in early premarket trading Tuesday following a rise in bond yields that pressured growth pockets in the market, a trend which weighed heavily on European tech stocks.
European markets also continued to digest the fallout of the German election on Tuesday after the vote on Sunday resulted in more uncertainty for the country.
The center-left Social Democratic Party (SPD) gained the largest share of the vote with 25.7% by a slim margin, with Angela Merkel's right-leaning bloc of the Christian Democratic Union and Christian Social Union gaining 24.1% of the vote.
Coalition negotiations between the main parties and two smaller counterparts, the Greens and Free Democrats, are likely to take weeks or even months. The SPD has previously rejected the option of forming another "grand coalition" with the CDU/CSU. Both parties have claimed a mandate to govern after the result.
On the data front, German consumer morale for October has brightened unexpectedly, according to the GfK institute's consumer sentiment index, published Tuesday. The survey of around 2,000 Germans climbed to 0.3 points from a revised -1.1 points for September, outstripping a Reuters forecast for -1.6.
Other events in focus include ECB President Christine Lagarde's speech at the ECB Forum on Central Banking at 1 p.m. London time and OPEC's World Oil Outlook which is due Tuesday early afternoon.
In terms of individual share price movement, Swiss industrial valve company VAT Group fell 8.5% to the bottom of the Stoxx 600, while compatriot Logitech fell 7.3% in early trade after Morgan Stanley cut the stock to "underweight" and sharply reduced its price target.
At the top of the European blue chip index, British engineering company Smiths Group climbed 3.1% after agreeing to sell its medical devices unit and declaring a dividend of 26p following strong earnings.
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- CNBC's Eustance Huang and Maggie Fitzgerald contributed reporting to this story.
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September 28, 2021 at 11:18AM
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European markets pull back as tech stocks fall sharply; Stoxx 600 down 1.2% - CNBC
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