European Shares Fall As Bond Yields Tick Up

European stocks fell on Tuesday, pulling back from record highs reached a day earlier as the yield on the 30-year Treasury bond climbed and new Covid-19 cases continued to rise around the world, raising concerns over a disconnect between fundamentals and high equity valuations.

U.S. Treasury yields rose as investors awaited the outcome of auctions set to be held for $34 billion of 52-week bills and $40 billion of 42-day bills.

Focus now shifts to the European Central Bank meeting on Thursday, which investors hope will give more clarity about stimulus plans for the bloc.

The pan European Stoxx 600 fell 0.8 percent to 438.73 after ending flat with a negative bias on Monday. The German DAX dropped 0.4 percent, France’s CAC 40 index shed 1 percent and the U.K.’s FTSE 100 was down 0.7 percent.

The British pound rose broadly versus its major peers after official figures showed Britain’s unemployment rate unexpectedly fell for a second month in a row to 4.9 percent in the December to February period.

British American Tobacco shares slumped 6.3 percent, Imperial Brands plummeted 5.9 percent and Swedish Match gave up 2.5 percent after reports that the Biden administration is considering requiring tobacco companies to reduce the nicotine levels in all cigarettes sold in the United States.

Real estate investment trust Hammerson lost 3.4 percent after it appointed Himanshu Raja as Chief Financial Officer and Executive Director, effective 26 April 2021.

Moneysupermarket.com declined 2.6 percent after its first-quarter revenue fell by 20 percent compared to 2020.

Associated British Foods was down 1.7 percent after the food processing firm reported a fall in pretax profit for the first half of fiscal 2021.

Danone SA shares fell 2.5 percent. The food company reported that its first-quarter consolidated sales were 5.66 billion euros, down 9.4 percent from 5.66 billion euros last year.

Deutz AG rose over 1 percent. The internal combustion engine manufacturer raised its full-year guidance for 2021 after reporting a 1 percent rise in first-quarter revenue.

Luxury carmaker BMW gained half a percent. The company reported sales growth in all significant regions of the world, in particular in China, and all brands in the first quarter of 2021.

K+S Group shares advanced 1.6 percent. The chemical company said it received allowance from the U.S. Justice Department for the sale of the Americas operating unit.

Medical technology company Getinge soared 5 percent after reporting a rise in first-quarter core profit.

Specialty chemicals company Sika gained 1.2 percent. The company said that its sales for the first-quarter were CHF 1.999 billion, representing an increase of 12.6 percent in local currencies from last year.