European shares fall in final full session of 2024 as bond yields remain higher

1:15 pm Monday, December 30th, 2024

By Sruthi Shankar

(Reuters) -European stocks fell on Monday, in line with Wall Street, as still-high government bond yields prompted investors to pull out of equities at the end of a year that has been positive for some regional markets.

The pan-European STOXX 600 index closed 0.6% lower, with technology and health care <.SXDP> leading broad-based declines.

Trading volumes were thin ahead of the New Year holiday on Wednesday. Stock markets in Germany, Italy and Switzerland are shut on Tuesday as well, while those in the UK and France have a half-day trading session.

The 10-year German bund yield traded near its highest since mid-November, tracking a rise in U.S. Treasury yields, as uncertainty around monetary policy next year and prospects of inflationary policies under a Trump presidency weighed on investor sentiment.

The STOXX 600 is still on course for a 5.9% annual rise, with German stocks leading regional gains and French shares lagging.

Still, the European benchmark lags the S&P 500’s 25% surge this year as interest rate cuts from the Federal Reserve and a boom in AI trades boosted Wall Street’s tech behemoths.

“The surging S&P 500 and Nasdaq underscore the market’s tech-fuelled triumph, though last Friday’s sell-off, triggered by climbing Treasury yields, was a sobering reminder of lingering rate concerns,” said Matt Britzman, senior equity researcher at Hargreaves Lansdown.

The German DAX dipped 0.4% on its final trading day of the year but looked on course for a 19% annual surge, making it the top performer this year among major European bourses.

On the flip side, France’s CAC 40 was set for an annual drop of 2.5%, driven by concerns about the country’s spiralling fiscal deficit and political turmoil.

Among sectors, food and beverages as well as automobiles are on track to be the worst performing sub-sectors across the continent this year, while banks are set to be the best faring.

Over on Wall Street, a slide in tech giants including Amazon and Microsoft pushed the S&P 500 to a more than one-week low. [.N]

Siemens Healthineers dipped 1.7% after Siemens AG’s Chief Financial Officer Ralf Thomas told the Handelsblatt newspaper that the German technology group is reviewing its majority stake in its medical technology unit.

BayWa surged 17% after the Munich-based trader of farming supplies and produce said it had reached a restructuring agreement with its major shareholders and financiers.

(Reporting by Sruthi Shankar and Shashwat Chauhan in Bengaluru; Editing by Janane Venkatraman and Shreya Biswas)