European, Asian Stocks Slip as Government Bond Rally Continues
London (Jun 9) The FTSE 100 was recently down 0.97% at 6,242.52, ending five days of gains as mining stocks slipped. In Frankfurt the Dax tumbled 1.38% to 10,085.99, while in Paris the Cac 40 fell 0.95% to 4,406.51.
Yields on major government debt fell as a rally sparked by Friday's disappointing U.S. jobs report continued and after the European Central Bank on Wednesday added corporate bonds to its program of government debt purchases.
In German the 10-year bund yield was recently at 0.04%, down 1 basis point, having earlier hit a low of 0.034%.
In the U.K. the yield on benchmark 10-year government debt, known as gilts, fell to a record low 1.222% and was recently down 1 basis point at 1.24%.
In the U.S. the yield on 10-year Treasury bonds was down 2 basis points at 1.68%, the lowest point since February last year. The Treasury yesterday conducted a successful auction of $20 billion-worth of 10-year debt at a high yield of 1.702% and will sell 30-year debt today.
S&P 500 mini futures were recently down 0.37%.
In a speech European Central Bank President Mario Draghi urged governments to do what it takes to spur the eurozone economy after years of weak growth risked causing permanent damage.
Meanwhile, German trade data showed imports unexpectedly fell in April, though exports defied forecasts for a 0.6% decline to hold steady on the month. In Britain the trade deficit in April unexpectedly shrunk as "Brexit" worries weighed on the pound, and thus helped exports.
A mining rally that had propelled the FTSE 100 abated. Glencore was down 2.3%. The mining and commodities group agreed to sell a 9.99% stake in its agricultural business to British Columbia Investment Management for $624.9 million. Chile-focused miner Antofagasta (ANFGY) was the worst performer on the FTSE 100, down almost 7%.
British Polythene Industries was recently up more than 33% at 966 pence after agreeing to a cash-and-stock offer from packaging company RPC Group worth 940 pence per share, or GBP261 million ($377.7 million).
In Paris hotel group Accor was recently down 2.9% at EUR38.76 ($44.02) after Credit Suisse downgraded their recommendation to underperform from neutral and lowered their target price to EUR36.30 from EUR40.60.
Remy Cointreau (REMYY) (REMYF) fell 3.8% in Paris. The drinks maker posted 8.9% annual sales growth and a 16.7% rise in adjusted net profit, though the gains were largely down to favorable currency movements and the company offered a lackluster promise of "growth in current operating profit, assuming constant exchange rates and consolidation scope."
In Tokyo the Nikkei 225 closed down 0.97% at 16,668.41 and the Topix lost 1.0% to close at 1,337.41. Japanese banking and insurance stocks including Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group declined as bond yields fell, while exporters lost steam as a rising yen made their goods less competitive.
In Hong Kong the Hang Seng closed down 0.14% at 21,297.88.
On mainland China the CSI Composite closed down 0.41% at 3,163.99.
In New Zealand Sky Network Television closed up 17.5% after agreeing to a NZ$3.4 billion ($2.4 billion) deal that will give Vodafone (VOD) a 51% stake in the business. Vodafone fell 4.4% in London.