LONDON — European stock markets on Tuesday suffered their worst session in a month as fiscal concerns drove risk-off sentiment.
The Stoxx 600 index provisionally fell 1.47%, its steepest loss since Aug. 1, as Germany’s DAX plunged 2.2%. Travel and technology were the worst-performing European sectors, down 3% and 2.7%, respectively.
That came amid a global rise in bond yields. Stateside, investors were spooked by the prospect of the loss of revenue following a recent court ruling that most of President Donald Trump’s global tariffs are illegal, sending Treasury yields higher.
The U.K.’s 30-year bond yield hit its highest level since 1998, with eyes on a political reshuffle thought to be preparation for a highly-anticipated budget set to be scheduled in the coming months. The British Pound was last down 1.25% against the U.S. dollar at $1.338.
France’s 30-year yield was at its highest since 2009 ahead of next week’s no confidence vote, which could see the government toppled over a fierce budget dispute.
Euro zone inflation data also landed Tuesday, showing a rise to a slightly higher-than-expected 2.1% in August.
In corporate news, Frankfurt-listed Fresenius Medical Care fell 5.3% after analysts at UBS downgraded the stock to a “Sell” rating.
In Italy’s tumultuous banking consolidation story, state-backed Monte dei Paschi bolstered its bid for domestic peer Mediobanca with a cash component of 0.90 euros ($1.05) per share, sweetening an original offer targeting 2.533 of its own stock for each Mediobanca share tendered.
This now represents a 11.4% premium against the close price of Mediobanca’s stock on Jan. 23. The Italian lender has been resisting Monte dei Paschi’s interest since the start of the year, rejecting the initial all-stock offer that runs to Sept. 8.
But last month’s failure to gain shareholder support for Mediobanca’s proposed purchase of Banca Generali – widely seen as a defensive play – has prompted some analysts to reassess the bank’s odds of avoiding a takeover down the line.
source: cnbc.com
