European equities drop to their lowest level in the past two months

European equities hit two-month lows on Monday, led by sectors including travel, entertainment and technology as fears of prolonged “Covid-19” restrictions in China and rising bond yields have fueled the selling pressure.

The pan-European Stoxx 600 index closed the trading session in fall of 2.9%, hitting the lowest level since 8 March. The shares of the travel and leisure companies were le prime losers, in drop of 6.0%.

Tech stocks fell 5.0% to their lowest since November 2020, as US and European government bond yields jumped to multi-year highs on bets on faster interest rate hikes to calm a jump in inflation. Reuters reported.

A member of the European Central Bank’s monetary policy committee said the bank should raise interest rates up to 3 times questyear to fight inflation.

Mining stocks were also affected and their index closed in down 4.4%, while Chinese iron ore futures plunged as much as 7% on concerns about demand in the world’s second largest economy after data showed export growth slowed in April to two digits.

The Stoxx 600 is in more than 5% drop from the level at the end of April, since Covid restrictions in China, the aggressive tightening of monetary policy and the war in Ukraine fuel concerns about a global economic slowdown.

The benchmark has fallen 15.6% since hitting an all-time high in January.

As investors awaited the latest inflation readings in the US, Wall Street’s S&P 500 Index and Dow Jones Industrial Average hit their lowest levels for 2022 on Monday.

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