European stocks fell to a six-week low on Fridayweighed down by the financial and healthcare sectors, as investor sentiment was dampened by fears that interest rates will stay high for longer than initially thought, driving US debt yields to all-time highs 16 years old.
The pan-European STOXX 600 index lost 0.6%, in its fourth consecutive session of losses, and sank to its lowest level since July 7. Rising Treasury yields pressured equities this week with the STOXX 600 plunging more than 2% for the week.
«Equity market valuations are coming under some pressure as bond yields hit new multi-year highs,» said UBS’s Kiran Ganesh.
Beleaguered property developer China Evergrande Group has filed for bankruptcy protection in the United States, while a package of measures from China’s securities regulator to revive the stock market failed to boost investor confidence amid a sluggish economy.
China-exposed luxury heavyweights LVMH, Kering and Hermès fell between 0.7% and 1.1% on growing concerns about dwindling demand from the world’s second-largest economy.
Europe’s largest bank, HSBC, and Britain’s Prudential, which also operate in China, lost 1.4% and 3.2% respectively, with Barclays cutting its price target for the latter.
In the health sector, Novo Nordisk, AstraZeneca and Roche Holding each fell more than 1%. European miners, which are also affected by developments in China, lost 1.5%.