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June 18, 2021, 10:02 a.m. EDT

European stocks tumble, tracking Wall Street losses, as Fed’s hawkish turn reveberates

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By Barbara Kollmeyer

European stocks tumbled Friday, with banks and energy companies leading declines, as investors continued to absorb a hawkish turn by the Federal Reserve and Wall Street stocks dropped.

The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP +0.32% , down 0.3% so far this week, went from modest losses to a 1.2% drop on Friday, with the German DAX /zigman2/quotes/210597999/delayed DX:DAX +0.05% down 1.5%, the French CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +0.54% off 0.6% and the FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.08% down 1.1%. The euro /zigman2/quotes/210561242/realtime/sampled EURUSD +0.0172% fell 0.3% to $1.1866, while British pound /zigman2/quotes/210561263/realtime/sampled GBPUSD 0.0000% dropped 0.6% to $1.3839 after disappointing U.K. retail sales data. A surge in the dollar weighed on those currencies.

U.S. stocks /zigman2/quotes/210598065/realtime DJIA +0.43% /zigman2/quotes/210599714/realtime SPX +0.37% /zigman2/quotes/210598365/realtime COMP -0.05% fell in early trading on Friday , as investors switched out of reflation trades in favor of technology names, echoing Thursday’s action.

The Fed was viewed as taking a slightly hawkish turn on Wednesday after its summary of economic projections showed two interest rate increases in 2023, and its admission that it has begun talking about when to slow the rate of bond purchases.

“Logically, in an environment where the pace for interest-rate increases was brought forth, someone would have expected Nasdaq to underperform notably, as the value of high-growth tech stocks is highly affected by changes in interest rates,” said Charalambos Pissouros, senior market analyst at JFD Group, in a note to clients.

“Higher interest rates mean lower present values for such firms. Nonetheless, it seems that investors rushed into adding such stocks to their portfolios, perhaps to take advantage of the limited time left for low interest rates,” said Pissouros.

Also on Thursday, the U.S. dollar soared and commodity prices tumbled, though that action seemed to be calming down on Friday, with a bounce for hard-hit gold . Tumbling bond yields was another reaction. The yield on the 10-year U.S. Treasury  /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y +1.30%  slipped further to 1.4888%. The yield saw its sharpest slide since June 4 between Wednesday and Thursday.

Read: Why the U.S. dollar is soaring — and what’s next — after Fed’s change in tone

Most sectors were in the red, led by financials, with HSBC /zigman2/quotes/208272822/composite HSBC +0.27% /zigman2/quotes/203901799/delayed UK:HSBA +0.28% down 2.7% and BNP Paribas /zigman2/quotes/206351084/delayed FR:BNP +0.14% slumping 4.7%. Energy stocks fell as TotalEnergies /zigman2/quotes/206172043/delayed FR:TTE +0.08% /zigman2/quotes/201824152/composite TTE +0.36% , BP /zigman2/quotes/202286639/delayed UK:BP +0.32% /zigman2/quotes/207305210/composite BP +0.90% and Royal Dutch Shell /zigman2/quotes/204253697/delayed UK:RDSB +0.14% fell 4% as those reflation trades unwound.

Not helping was data showing U.K. retail sales fell 1.4% in May , driven by decreases at food stores and on the heels of a sharp rise in the previous month, the Office for National Statistics said Friday. Economists polled by The Wall Street Journal expected retail sales to increase 1.6%.

Shares of Tesco /zigman2/quotes/203761082/delayed UK:TSCO -0.77% fell almost 3%, after the British grocer reported a 1% rise in retail sales 1% on the year on a comparable basis and said that its profit outlook for the full year remains unchanged.

“Tesco’s first quarter numbers look sluggish, but that’s because they’re lapping the unprecedented demand triggered by the pandemic this time last year,” said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, in a note to clients.

Shares of Kerry Group /zigman2/quotes/202059924/delayed IE:KRZ +2.72% rose 1% after the Ireland based food company said late Thursday that it will sell its consumer foods’ meats and meals business in the U.K. and Ireland to Pilgrim’s Pride /zigman2/quotes/204152423/composite PPC +0.28% for 819 million euros ($975.1 million).

/zigman2/quotes/210599654/delayed
XX : STOXX
470.07
+1.49 +0.32%
Volume: 0.00
Oct. 20, 2021 11:03p
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/zigman2/quotes/210597999/delayed
DAX
DX : Xetra Indices
15,522.92
+7.09 +0.05%
Volume: 54,739
Oct. 20, 2021 6:30p
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/zigman2/quotes/210597958/delayed
FR : France: Euronext Paris
6,705.61
+35.76 +0.54%
Volume: 65,963
Oct. 20, 2021 6:05p
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/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,223.10
+5.57 +0.08%
Volume: 551,713
Oct. 20, 2021 4:56p
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/zigman2/quotes/210561242/realtime/sampled
US : Tullett Prebon
1.1653
+0.0002 +0.0172%
Volume: 0.0000
Oct. 20, 2021 6:08p
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/zigman2/quotes/210561263/realtime/sampled
US : Tullett Prebon
1.3825
0.0000 0.0000%
Volume: 0.0000
Oct. 20, 2021 6:09p
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
35,609.34
+152.03 +0.43%
Volume: 267.33M
Oct. 20, 2021 5:04p
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/zigman2/quotes/210599714/realtime
US : S&P US
4,536.19
+16.56 +0.37%
Volume: 1.84B
Oct. 20, 2021 5:04p
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/zigman2/quotes/210598365/realtime
US : Nasdaq
15,121.68
-7.41 -0.05%
Volume: 3.68M
Oct. 20, 2021 5:16p
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add Add to watchlist BX:TMUBMUSD10Y
BX : Tullett Prebon
1.66
+0.02 +1.30%
Volume: 0.00
Oct. 20, 2021 4:57p
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/zigman2/quotes/208272822/composite
US : U.S.: NYSE
$ 29.94
+0.08 +0.27%
Volume: 1.38M
Oct. 20, 2021 4:00p
P/E Ratio
13.25
Dividend Yield
3.64%
Market Cap
$121.79 billion
Rev. per Employee
$330,477
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/zigman2/quotes/203901799/delayed
UK : U.K.: London
433.30 p
+1.20 +0.28%
Volume: 15.65M
Oct. 20, 2021 4:35p
P/E Ratio
13.12
Dividend Yield
3.69%
Market Cap
£88.26 billion
Rev. per Employee
£257,711
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/zigman2/quotes/206351084/delayed
FR : France: Euronext Paris
58.18
+0.08 +0.14%
Volume: 1.70M
Oct. 20, 2021 5:35p
P/E Ratio
9.41
Dividend Yield
4.57%
Market Cap
€72.57 billion
Rev. per Employee
€461,970
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/zigman2/quotes/206172043/delayed
FR : France: Euronext Paris
44.87
+0.04 +0.08%
Volume: 4.80M
Oct. 20, 2021 5:35p
P/E Ratio
21.47
Dividend Yield
5.88%
Market Cap
€118.36 billion
Rev. per Employee
€995,543
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/zigman2/quotes/201824152/composite
US : U.S.: NYSE
$ 52.32
+0.19 +0.36%
Volume: 1.75M
Oct. 20, 2021 4:00p
P/E Ratio
20.83
Dividend Yield
N/A
Market Cap
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Rev. per Employee
$1.13M
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/zigman2/quotes/202286639/delayed
UK : U.K.: London
363.10 p
+1.15 +0.32%
Volume: 30.31M
Oct. 20, 2021 4:35p
P/E Ratio
11.76
Dividend Yield
4.37%
Market Cap
£71.98 billion
Rev. per Employee
£2.21M
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/zigman2/quotes/207305210/composite
US : U.S.: NYSE
$ 30.13
+0.27 +0.90%
Volume: 6.86M
Oct. 20, 2021 4:00p
P/E Ratio
11.78
Dividend Yield
4.16%
Market Cap
$99.32 billion
Rev. per Employee
$2.84M
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/zigman2/quotes/204253697/delayed
UK : U.K.: London
£ 1,801.40
+2.60 +0.14%
Volume: 5.19M
Oct. 20, 2021 4:35p
P/E Ratio
36.41
Dividend Yield
0.04%
Market Cap
£138.08 billion
Rev. per Employee
£1.52M
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/zigman2/quotes/203761082/delayed
UK : U.K.: London
272.15 p
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P/E Ratio
17.15
Dividend Yield
3.36%
Market Cap
£21.06 billion
Rev. per Employee
£158,263
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/zigman2/quotes/202059924/delayed
IE : Ireland: Dublin
117.10
+3.10 +2.72%
Volume: 390,176
Oct. 20, 2021 4:30p
P/E Ratio
36.58
Dividend Yield
0.76%
Market Cap
€20.16 billion
Rev. per Employee
€267,438
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/zigman2/quotes/204152423/composite
US : U.S.: Nasdaq
$ 28.92
+0.08 +0.28%
Volume: 398,734
Oct. 20, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$7.03 billion
Rev. per Employee
$214,342
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