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Europe close: Stocks slip slightly as bond yields grind higher
(WebFG News) - Stocks finished on a mixed note, with investor sentiment dampened by the negative reaction from markets to Google parent Alphabet's latest set of results and rising bond yields on both side of the Atlantic.
Investors were also keeping an eye on movements in crude oil markets ahead of a 12 May deadline for the signatories to the Iran nuclear deal to agree to revamp the accord or risk Washington reimposing its sanctions on Tehran.
Against that backdrop, by the closing bell, the benchmark Stoxx 600 index was down by 0.02% at 383.11, alongside a 0.17% dip for Germany's Dax to 12,550.82 but an advance of 0.10% for the Cac-40 to 5,444.16.
In parallel, front month Brent crude oil futures were up by 0.03% at $74.73 a barrel on the ICE and euro/dollar 0.17% higher at 1.2229.
Meanwhile, the yield on the benchmark 10-year US Treasury note was unchanged at 2.98%, having earlier made a brief foray above 3.0% - its first since end-2013.
Rising government bond yields were considered to be highly important given the possibility that they might detract from interest towards stocks, which some albeit not all analysts believed might explain recent weakness in some of the equity bull market's high-flyers, such as tech heavyweight Alphabet.
Commenting on the link between bonds and stocks, analysts at Macquarie told clients: "volatility in other markets is likely to remain elevated as investors attempt to assess the impact of higher yields.
"In particular equity investors will be looking at the bond market for guidance, despite the fact that US earnings have been very strong in Q1, and that valuations (even in the US) are now back at levels seen for much of the past couple of years."
The economic data on tap on Tuesday underwhelmed, with business confidence in Germany and Italy weakening by more than expected in April and with the IFO institute saying of the German data that "high spirits" among the country's businessmen had "evaporated".
IFO's business confidence gauge dropped from a reading of 103.3 for March to 102.1 in April (consensus: 102.8), with a gauge of business expectations at its lowest ebb since August 2016.
On the corporate side of things, stock in Swedish fashion retailer Hennes&Mauritz was higher despite market chatter that the company might be preparing to slash its dividend payout for the first time ever.
SAP AG was an outperformer after the company nudged its forecast for full-year sales to as much as 25.3bn, versus a previous forecast for 25.1bn in sales.