European Stocks Slump, German Bond Yields Turn Negative as 'Brexit' Worries Mount
Frankfurt (Jun 14) European stocks slumped on Tuesday as Britain's best-selling newspaper told its readers to vote for "Brexit," pushing German government bond yields into negative territory for the first time ever as investors sought safe assets.
The yield on 10-year German government bonds, which moves the opposite way to the price, was recently down 5 basis points at minus 0.03%.
The FTSE 100 had recently plunged 1.30% to 5,966.42, with banks, fund managers and insurers including Barclays (BCS) , Schroders and Lloyds Banking (LYG) as well as miners, dominating the decliners. The Sun's "Brexit" declaration made it the first national paper to tell its readers how they should vote. It came after recent polls have revealed a swing to the "leave" camp and as the Fed prepared to begin a two-day meeting to set rates.
In Frankfurt, the Dax slumped 1.24% to 9,537.43 and in Paris the Cac 40 was down 1.34% at 4,170.55.
The pound was recently down 0.88% against the dollar at $1.4145. The euro fell 0.65% against the dollar to $1.1219.
Figures out today showed the U.K. inflation rate held steady at an anemic 0.3% in May, disappointing those looking for 0.4% annual price growth. However, the figures, along with disappointing accompanying producer price figures and retail price data in line with forecasts, were eclipsed by worries about a potential British vote to leave the European Union at the June 23 referendum.
S&P 500 mini futures were recently down 0.35%.
In Brussels, figures from the European Union's statistics arm revealed a stronger-than-expected 1.1% rebound in industrial output in the eurozone in April after output declined by 0.7% in March. From Spain, final consumer price data for May confirmed a tenth month of falling, or briefly stagnant, consumer prices.
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In London electronics distributor Premier Farnell was up more than 50% at 164 pence, after agreeing to a 165-per-share, or GBP615 million ($869.8 million) takeover offer from Switzerland's Daetwyler Holding (DATWY) . The Swiss buyer was down more than 4% in Zurich.
Plant hire company Ashtead Group (ASHTY) pared initial gains to trade up 0.8% in London after beating full-year and four-quarter profit expectations and announcing a GBP200 million share buyback.
Outsourced security services company G4S was recently down another 2% in London after slumping on Monday on news it had employed for almost nine years the alleged killer of 50 people attending an Orlando night club on Sunday.
In Frankfurt the Netherlands' NXP Semiconductor (NXPI) was recently up 1.2% after it announced the $2.8 billion sale of a unit to a Chinese consortium. NXP has its main listing on Nasdaq, where it closed down 1.1% at $87.40 on Monday.
In Zurich Swiss asset manager GAM was recently down 16% after warning of a potential 50% drop in full-year profit as performance fees decline.
Asian stocks were mixed, with Japanese indices building on yesterday's steep declines as the yen rose.
In Tokyo, the Nikkei 225 closed down 1.0% at 15,859.00 and the Topix dropped 0.98% to 1,271.93.
Revised Japanese industrial output data for April show output fell 3.3% year-on-year but rose 0.5% on the month. The figures were better than the initial report and reduce the likelihood of Bank of Japan action at its Thursday meeting.
In China, indices largely edged higher as the world's largest indexing company, MSCI, prepared to announce later today in New York whether it will include mainland Chinese shares in its global indices.
The CSI 300 composite was up 0.31% at 3,075.98.
In Hong Kong, the Hang Seng closed down 0.65% at 20,379.26.