Equities: Bond stress triggers global stock retreat - Deutsche Bank

Deutsche Bank strategists highlight a global equity selloff as wider European bond spreads and inflation concerns weigh on risk sentiment. European banks lead losses, while the S&P 500 retreats from record highs and the Russell 2000 underperforms. Asian equities also weaken despite Samsung’s sharp profit growth.

Risk-off tone hits global stocks

"This backdrop of wider bond spreads and fresh inflation fears meant it was a rough day for risk assets. That was particularly clear in Europe, where the STOXX 600 (-1.00%) fell back after three consecutive gains, and there were even bigger losses for the CAC 40 (-1.22%) and Italy’s FTSE MIB (-2.51%) with European banks (-3.38%) bearing the brunt of the losses."

"That also carried over to the US, where the S&P 500 (-0.22%) slipped back from its record high the previous day. And while the headline decline moderated as the session went on, there were still signs of stress under the surface, with almost three-quarters of the index lower on the day as cyclical sectors including industrials (-2.14%) and materials (-1.53%) underperformed."

"And while relative resilience in tech stocks limited the losses for the Nasdaq (-0.22%) and Mag-7 (-0.20%), the small-cap Russell 2000 (-1.31%) sunk to a 4-month low."

"Chinese markets reopened after the week-long Golden Week holiday on a positive note but have struggled to sustain their early gains with the CSI 300 (-0.43%) and Shanghai Composite (-0.27%) now lower. Elsewhere the Hang Sang (-0.69%) and the ASX (-0.74%) are also lower but with US and European equity futures broadly flat."

"In Asia, the KOSPI (-1.24%) is the weakest main market, and it’s a sign of the times that Samsung reported a 9-fold increase in profits which disappointed some investors. The weakness in tech stocks is also impacting the Nikkei (-0.87%)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)