London: European shares were lower in morning trade on Thursday, tracking a decline on Wall Street after a spike in Treasury yields triggered a sell-off in equity markets.
At 3:00pm, the FTSEurofirst 300 index of top European shares was down 1.3% at 859.13 points.
Banks were among the early fallers. HSBC, BNP Paribas, Credit Suisse, Deutsche Bank and UBS fell between 1.4 and 3.1%.
“Bond yields are rising from extremely depressed levels, and they show that expectations for the economy are improving,” said Bernard McAlinden, investment strategist at NCB Stockbrokers, in Dublin.
“People are worried about inflation with all the money that’s being pumped into the system. That could nip the economic recovery in the bud ... (though) the main driver will be economic data coming through.”
The European benchmark index is up 33.1% from the lifetime low it hit on 9 March as investors have become more confident about prospects of an upturn.
Insurers falling included France’s Axa and the UK’s Prudential, down 3.6 and 3% respectively.
With the slide in US equities hurting the price of copper and other metals, miners fell.
Anglo American, BHP Billiton, Kazakhmys, Rio Tinto, Vedanta Resources and Xstrata were between 1.3 and 2.5% lower.
Across Europe, Britain’s FTSE 100, Germany’s DAX and France’s CAC-40 were between 1.2 and 1.3% lower.
Man Group, the world’s largest-listed hedge fund firm, sank 12.5% after saying that assets under management fell to $44 billion by 26 May, from $46.8 billion at end-March, and profit fell.
British building supplies company Wolseley fell 9.9% after nine-month profits slumped 80% as most of its markets weakened in March and April. Relatively upbeat macroeconomic news failed to provide an immediate lift.
The Conference Board research group’s Leading Economic Index for the euro zone rose 1.8% to 93.8 points in April, suggesting the single currency area’s economy may be bottoming out.
German unemployment rose by a smaller-than-expected 1,000 month-on-month in May, adjusted for seasonal swings, Federal Labour Office data showed.
The headline unadjusted figure declined by 127,000 to 3.458 million, the Office said, noting that statistical changes had helped to improve the May jobless figures.
Later in the session, attention will turn to weekly US jobless numbers.
US stocks dropped on Wednesday as rising yields on US government debt fuelled concern that businesses and consumers could face higher borrowing costs, which could hamper an economic recovery.