Technology stocks were the main driver of declines on European exchanges on Monday. The technology segment of the pan-European Stoxx 600 index weakened 3.6 percent. He found himself so near a three-month low.
The decline in not only technology stocks was due to two main factors at the start of the new trading week: the deteriorating epidemic situation in Europe, but also in the United States, where it is massively spreading the coronavirus variant of omicron, and increasing yields on both European and US bonds.
Indeed, investors expect that the era of measures that supplied liquidity to markets during the pandemic is slowly coming to an end. And this is in the wake of steadily increasing inflation, which has already prompted the US Fed to announce the end of quantitative easing and consider raising interest rates. Similar pressure is also escalating on the European Central Bank as eurozone inflation continues to break 20-year records.
Yield on both US and German government bonds are close to two- to three-year highs, increasing investors’ incentive to prefer placing excess liquidity just in Bonds. These are beginning to be a more acceptable alternative to equities that belong to riskier assets.
