Tech slide, China woes weigh on European stocks

BY Reuters | TREASURY | 09/28/21 03:23 AM EDT

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Sept 28 (Reuters) - European stocks fell on Tuesday, as a surge in government bond yields pressured high-growth technology shares, with fresh signs of a slowdown in China's economy weighing on investor sentiment.

The pan-European STOXX 600 index was down 0.4%, falling for a third session as a jump in U.S. Treasury yields signalled that investors were bracing for higher cash rates and the risk of persistent inflation.

Data showed profit growth at China's industrial firms slowed for a sixth month in August, with an unfolding power crisis a growing threat to output and bottom-lines.

However, a rally in Brent crude futures above $80 per barrel continued to support energy stocks, with the oil & gas index rising 1.1% to fresh highs since February 2020.

Banks were supported by rising rates, but technology stocks fell the most, down almost 2% after their Wall Street peers tumbled overnight.

Swiss computer peripherals maker Logitech dropped 6.3% as Morgan Stanley downgraded the stock to "underweight".

Dutch semiconductor supplier ASM International fell 2.7% despite raising its third-quarter order intake guidance. (Reporting by Sruthi Shankar in Bengaluru; Editing by Subhranshu Sahu)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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