European stocks were mostly higher on Thursday, reversing early losses triggered by concerns over rising government bond yields on both sides of the Atlantic.
“This afternoon the competition was hotly contested between buyers and sellers, but overall it looks like buyers could gain the upper hand before a speech from [Federal Reserve chairman] Jerome Powell, ”said IG Chris Beauchamp, Chief Market Analyst.
The pan-European Stoxx 600 index fell 0.37% to 411.91, but the Cac-40 managed to push its head above water, adding 0.01% to 5,830.65, while the Ibex Spanish 35 climbed 0.30% to 8,354.0.
Nonetheless, Thursday’s trading looked distinctly defensive, with the Stoxx 600 gauge for utilities one of the best market groups and rising 1.68%.
Oil and gas issues also performed well, climbing 1.74% after OPEC + surprised traders by deciding to keep the group’s crude oil production levels unchanged.
This allowed Brent to reach a nearly 52-week high at the ICE high of $ 67.27 a barrel.
In contrast, tech stocks continued to be unloved, as the sector’s Stoxx 600 gauge fell 3.31%.
German 10-year Bund yields fell two basis points to -0.31%, following a drop in same-date US Treasuries ahead of Powell’s scheduled speech for 5:05 GMT.
Overnight, the benchmark 10-year US Treasury yield hit 1.477%, although it remained well below the one-year high of 1.614% recorded the week before.
In a new boost for investor sentiment, German Finance Minister Olaf Scholz said Bloomberg that Berlin was planning additional debt financing spending in 2021, although it refused to rely on reports that Germany was planning an additional € 50 billion in public spending.
In the equity news, shares of German airline Lufthansa fell after recording record losses for 2020 and scaling back its capacity plans for 2021 as the Covid-19 pandemic continued to hit its markets.
Vistry Shares rose as the homebuilder reported better-than-expected annual earnings and resumed dividend payments thanks to a strong second-half performance.