European stocks ends lower on higher yields and tech slump
European equities continued their decline from Tuesday's sharp sell-off, hitting a two-week low on Wednesday. The Stoxx Europe 600 Index fell 0.1% to close at 651.16, continuing a six-day downward trend. Regional indexes also fell, with the CAC 40 down 0.1%, the DAX mixed, and the FTSE 100, IBEX 35, and FTSE MIB ending mixed. Bond yields in the Eurozone hit multi-year highs due to fears of prolonged Middle East conflict, higher energy prices, and increased defence borrowing.
Tech stocks suffered the largest declines, while investors awaited U.S. Federal Reserve meeting minutes. The U.S. Treasury announced a doubling of its liquidity-support buyback operations, which helped stabilize the U.S. market and provide relief to European equity valuations. ECB Chief Economist Philip Lane cautioned that Eurozone inflation remains above the 2% target, while Brent crude futures hovered near three-week highs due to reduced commercial transit through the Strait of Hormuz.
The market now focuses on upcoming monetary policy triggers and ECB President Christine Lagarde's comments on navigating potential stagflation.
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