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European markets drop amid cautious trade in global markets

Stocks in Europe

The pan-European Stoxx 600 fell 1.2%, with tech stocks leading the losses

Stocks in Europe retreated on Monday amid cautious trade in global markets.

The pan-European Stoxx 600 fell 1.2% in early trade, with tech stocks dropping 2.3% to lead losses, while the travel and leisure sector bucked the downward trend to move 0.6% higher.

The lacklustre open follows a trend set in the U.S. and Asia as U.S. stock futures fell more than 150 points early on Monday, after the S&P 500 and the Nasdaq Composite snapped a two-week winning streak with a weekly loss of 0.7% and 1.6%, respectively.

Some equity investors have grown concerned about rapidly rising bond yields in recent weeks as they could hurt high-growth companies reliant on easy borrowing, and diminish the relative appeal of stocks. Rising bond yields reflect market confidence that an economic recovery is near, following the coronavirus pandemic.

The 10-year Treasury yield climbed 14 basis points last week to 1.34%, near its highest level since February 2020. The benchmark rate has added 25 basis points so far this month.

Asia-Pacific stocks were also mixed in Monday trade as China left its benchmark lending rate unchanged over the weekend.

Developments around the pandemic and vaccine deployment remain in focus. The U.K. is set to detail how it plans to lift lockdown measures in the coming months, as its vaccination rollout maintains its good pace.

Meanwhile, the White House said Sunday that it expects to ship out millions of delayed coronavirus vaccine doses this week after a freeze disrupted logistics.

Tedros Adhanom Ghebreyesus, director-general of the World Health Organization, is due to address a press conference Monday about the latest developments on the pandemic.

On the data front, Germany’s Ifo Institute releases its February survey on the business climate in the country.

In terms of individual share price movement, French real estate investment trust Icade jumped 4.5% to lead the Stoxx 600 in early trade after its full-year earnings report.

At the bottom of the index, G4S shares dropped more than 9% after Canada’s GardaWorld said it would not raise its takeover bid for the British security firm.

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