European stocks continued their downward trajectory in early trading, mirroring the decline seen in Asian equities. This persistent slide follows a sharp drop in the previous session, with the primary culprit being the relentless surge in global bond yields, which continues to exert significant pressure on financial markets.
The broad-based Stoxx Europe 600 index registered a 0.3 percent decline, extending its losses from the previous day when it shed 1 percent.
Across the Asian markets, Hong Kong’s Hang Seng index experienced a notable drop of 2.8 percent, while China’s CSI 300 index also dipped, albeit to a lesser extent, losing 0.3 percent of its value.
The downturn in equity markets is closely linked to the recent sell-off in US Treasuries, which further intensified on Monday. Mike Zigmont, Head of Trading at Harvest Volatility Management, observed, “Since mid-September, it appears that stocks are particularly sensitive to movements in the bond market. There has always been a relationship between these two markets, but lately, it seems more pronounced than ever before.”
In summary, European stocks are grappling with ongoing declines, echoing the trend observed in Asian markets, as the surge in global bond yields continues to cast a shadow over investor sentiment. The interconnectedness between the stock and bond markets has become increasingly pronounced, with market participants closely monitoring these developments.
