European stocks fell on Monday, with the technology sector the biggest loser, as bond yields soared after a barrage of statements from central bankers on the need for further monetary tightening to control inflation.
The pan-European STOXX 600 fell 0.8% to 422.65, with the technology sector down 2.4%.
The losses came in the shadow of a fresh rally in yields, with the yield on the German 10-year gaining 10 basis points to a two-month high.
European Central Bank Executive Committee member Isabel Schnabel warned over the weekend that central banks will need to act decisively to counter the rally in inflation. And other ECB members, including Francois Villeroy and Martins Kazaks, also indicated that the central bank is preparing for another big step at its next meeting in September.
Their remarks followed aggressive rhetoric from Federal Reserve chief Jerome Powell on Friday that indicated the US central bank is not expected to let its foot off the gas, continuing its big rate hikes to rein in inflation.
Markets are now not ruling out the ECB raising interest rates by 75 basis points in September.
On the board, the German DAX fell 0.6% and closed at 12,892.99 points, while the French CAC 40 lost 0.8% at 6,222.28 points. Markets in Britain remained closed today due to a bank holiday.
In the region, Italy’s FTSE MIB closed slightly down 0.2%, while Spain’s IBEX 35 lost 0.9%.
In business developments, German energy giant Uniper also requested fresh financial aid from the German government, bringing its total aid bill to €19 billion. The company’s shares jumped 3%.
Source: Capital
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