* European shares up after Monday's drop
* STOXX 600 index up 0.2%
* Banks, oil, travel stocks lead gainers
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FINANCIALS PROP EUROPE UP (0828 GMT)
European shares are off to a mildly positive start this
morning with financials providing the biggest uplift, helped by
a continued sell-off in the bond market.
Banks are rising 0.8% and other cyclical sectors from oil
and gas to travel are also doing nicely, driving the STOXX 600
up 0.2% in early deals and helping the pan-regional benchmark
recover part of yesterday's drop.
Among top movers, a collaboration deal in obesity treatment
with Novo Nordisk is pushing Zur Rose shares up for a
second day, while Games Workshop is down 5% as its
strong profit performance failed to impress.
Here's your opening snapshot:
(Danilo Masoni)
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SELLING BONDS BEFORE BIDEN (0807 GMT)
The bond market has sprung back to life in recent days, with
yields on U.S. Treasury bonds jumping to their highest in 10
months as investors brace for a wave of government spending
under a Joe Biden administration.
The move is noticeable because, while stock markets have
rocketed to new record highs, bond yields had until recently
remained low and stable -- a deliberate aim of central banks
that have chucked record stimulus at markets to keep government
borrowing costs low.
On Tuesday the 10-year Treasury yield edged up another 2.4
basis points to 1.158%. Not only have markets brought forward
bets on Fed interest rate hikes to 2023, many also reckon it
could start withdrawing -- or tapering -- asset purchases
earlier.
They got no relief from Fed officials, with Atlanta Fed
president Raphael Bostic declaring himself "open" to tapering in
late 2021.
If the move is the start of a longer-term shift higher, it
has potentially big consequences for equity traders accustomed
to a backdrop of near record low yields.
That alongside rising COVID-19 cases and a selloff in U.S.
technology shares had unnerved investors on Monday, alongside
Washington's threats to delist shares in major Chinese
companies.
On Tuesday though, European shares set to open higher and
Japanese stocks earlier hitting a new record. The MSCI World
Index is back in the black and oil prices are 0.8% higher.
Concerns over the future regulation of social networks sent
Twitter shares falling as much as 12% overnight after its move
to suspend Donald Trump's widely-followed account. Facebook and
Alphabet, which issued similar bans, also fell.
Wall Street firms such as Goldman Sachs and JPMorgan, and
Blackrock's iShares ETF arm all said they had cut exposure to
China's stocks as a result of pressure from Washington.
Key developments that should provide more direction to
markets on Tuesday:
-Swiss chemicals maker Sika posted a nearly 3% drop in
annual sales.
-UK consumer spending contracted 2.3% year on year in
December, payment card provider Barclaycard said, the biggest
drop since June. Spending in pubs and bars dropped 71%.
(Tommy Wilkes)
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EUROPE SEEN STEADYING AT THE OPEN (0630 GMT)
European shares look set to open flat this morning after
correcting from 10-month highs in the previous session on
concerns that surging Coronavirus cases could slow down a global
economic recovery.
Futures on the euro STOXX 50 and the DAX indexes are up less
than 0.1%, while FTSE 100 futures were just around flat.
Over in Asia, shares took a breather as political turmoil in
Washington and rising coronavirus cases gave pause, although a
selloff in U.S. Treasuries deepened as investors reckoned on a
big spending government.
(Danilo Masoni)
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