European stocks slip as Feds Powell testifies, but Sky rallies after takeover offer


European stocks fell Tuesday, declining alongside U.S. stocks as Federal Reserve Chairman Jerome Powells upbeat assessment of the U.S. economy underscored concerns that the central bank will ramp up its pace of raising borrowing rates.

Also in focus Tuesday was the unfolding battle to control British broadcaster Sky PLC, which has landed a roughly $31 billion buyout bid from Comcast Corp.

How markets are trading

The Stoxx Europe 600 index
SXXP, -0.18%
ended down 0.2% at 382.36 as the consumer goods and telecom sectors led decliners.


Germanys DAX 30 index
DAX, -0.29%
slipped 0.3% to 12,490.73, and Frances CAC 40
PX1, -0.01%
closed 0.01% lower at 5,343.93. The U.K.s FTSE 100
UKX, -0.10%
edged down 0.1% to 7,282.45.


The euro
EURUSD, -0.6819%
bought $1.2227, down from $1.2319 late Monday in New York.

Read: Italian election stocks to buy and avoid ahead of Sundays vote

Whats driving markets


European stocks wilted early in the session as investors moved with caution before Powells appearance before the House Financial Services panel. In afternoon trade, stocks moved lower as U.S. Treasury yieldsshot higher and the widely watched ICE Dollar Index
DXY, +0.55%
hit its highest in more than five weeks after Powell during his testimony said the worlds largest economy has strengthened since December.


Opinion: Powells first faux pas came quick

Equity markets have been swayed by concerns that the Fed may raise interest rates four times this year instead of the three times that had been widely anticipated. Such concerns have pushed U.S. bond yields higher, as prices fall, and the 10-year Treasury note
TMUBMUSD10Y, +1.24%
is rising toward the 3% mark. Higher U.S. interest rates tend to drive financial markets globally in part as many companies conduct business in the U.S.


Powells testimony was his first to U.S. Congress after taking over as the central banks boss. On Thursday, he will testify Thursday before a Senate committee.

Read: Fed and Powell are on inflation watch as anxious investors look on

Stock movers

Sky PLC shares
SKY, +20.50%
rocketed up 21% to 13.32 pounds a share in London trade after Comcast
CMCSA, -6.63%
made a tentative 拢22.1 billion ($30.9 billion) offer for the British broadcaster. The U.S. companys bid represents a 16% premium on 21st Century Fox Inc.s
FOX, -3.10%
buyout offer, which is linked to a Walt Disney Co.
DIS, -4.34%
deal for Fox assets.


Philips Lighting NV shares
LIGHT, -2.00%
fell 2% after the Dutch company said it has bought back 71 million ($87.5 million) worth of its own shares from Royal Philips
PHG, -1.79%
.


Persimmon PLC
PSN, +4.66%
rose 4.7%. The U.K. home builder posted a 25% rise in 2017 pretax profit after selling more houses at higher prices.

What strategists are saying

Whilst the reaction was that of a market which is expecting a mildly more hawkish Fed Chair, the reaction was also fairly tame in comparison to what we have seen earlier in the month, said City Index senior market analyst Fiona Cincotta, in a note.


This tame reaction suggests that market fears have subsided quite substantially from earlier in the month. Fundamentals remain strong, Powell has put in a solid, optimistic but not overly hawkish first appearance and there appears little reason to fear gradual rate hikes going forward, she added.

Economic data

A preliminary reading of inflation in Spain in February came in at 1.1% from the INE statistics agency. Thats above the 0.8% FactSet consensus estimate and higher than Januarys reading of 0.6%.

Related Topics European Markets Europe Investing Stocks European Central Bank


Quote References SXXP -0.70 -0.18% DAX -36.31 -0.29% PX1 -0.33 -0.01% UKX -7.13 -0.10% EURUSD -0.0084 -0.6819% DXY +0.50 +0.55% TMUBMUSD10Y +0.04 +1.24% SKY +226.50 +20.50% CMCSA -2.62 -6.63% FOX -1.19 -3.10% DIS -4.76 -4.34% LIGHT -0.66 -2.00% PHG -0.70 -1.79% PSN +116.00 +4.66% Show all references
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