European Stocks Close Weak As Treasury Yields Rise On Rate Hike Hopes

(RTTNews) - European stocks closed on a weak note on Tuesday as Treasury yields surged higher amid expectations the Federal Reserve will start hiking interest rate as soon as March.

Worries about inflation and concerns over potential supply disruptions due to the attacks on fuel tankers in the UAE by Yemen's Iran-aligned Houthi rebel group hurt as well.

The yield on U.S. 10-year Treasury Note surged above 1.8% to a two-year high on Tuesday amid expectations the Federal Reserve might hike interest rate by 50 basis points by March.

The pan European Stoxx 600 declined 0.97%. The U.K.'s FTSE 100 ended 0.63% down, Germany's DAX slid 1.01% and France's CAC 40 shed 0.94%, while Switzerland's SMI ended lower by 0.82%.

Among other markets in Europe, Austria, Belgium, Denmark, Finland, Greece, Ireland, Netherlands, Poland, Russia, Spain, Sweden and Turkey closed with sharp to moderate losses.

Norway and Portugal posted modest losses. Czech Republic moved higher, while Iceland ended flat.

Automakers closed lower as industry data showed new car registrations in the EU dropped 22.8% year-on-year to 795,295 units in December after a 20.5% slump in November.

In the UK market, Ashtead Group, RightMove, Unilever, Smith (DS), JD Sports Fashion, Ferguson, Croda International Group, Halma, Scottish Mortgage, Experian, Dechra Pharmaceuticals, Barclays and CRH lost 2 to 5%.

DCC, BT Group, Pearson, Phoenix Group Holdings, Vodafone Group, Sainsbury (J), Royal Dutch Shell and BAE Systems gained 1.4 to 3.5%.

In Paris, WorldLine, ArcelorMittal, Teleperformance, Faurecia, STMicroElectronics, Schneider Electric and L'Oreal lost 2 to 3.7%.

Technip rallied nearly 3%. Atos gained more than 2%, while Sodexo and Thales both advanced by about 1.75%.

In the German market, Sartorius, Infineon Technologies, Merck, Siemens, Covestro and Symrise shed 2 to 2.8%. Continental, Brenntag, RWE, Deutsche Wohnen, Bayer and SAP also ended notably lower.

Adidas, Fresenius Medical Care, Fresenius, Daimler, Zalando and Deutsche Telekom closed higher.

In economic news, the UK unemployment rate decreased in three months to November, data from the Office for National Statistics showed.

The unemployment rate dropped to 4.1% in three months to November. The rate was forecast to remain unchanged at 4.2%.

The employment rate increased by 0.2 percentage points on the quarter to 75.5%, data showed. During October to December, the number of job vacancies rose to a new record of 1,247,000.

Survey results from the ZEW - Leibniz Centre for European Economic Research showed German economic confidence improved more-than-expected to a six-month high in January as the economy is expected to pick up over the coming months.

The ZEW Indicator of Economic Sentiment rose to 51.7 in January from 29.9 in the previous month. The reading was well above the economists' forecast of 32.0.

Meanwhile, the assessment of the economic situation worsened again in the current survey. The corresponding index dropped 2.8 points to -10.2 in January. The expected reading was -8.5.

Data from the Federal Statistical Office showed Switzerland's producer and import prices rose 5.1% year-on-year in December.

The producer price index rose 3.1% annually in December and import prices increased 9.2%. On a monthly basis, producer and import prices decreased 0.1% in December, the data showed.