Key Moments:
- The STOXX 600 index dropped by 0.54% on Monday, the first decline in around five weeks.
- Luxury stocks fell after China’s April retail sales disappointed markets.
- Eurozone bond yields have climbed, with Germany’s 10-year yield reaching 2.60%.
Market Pullback Ends Winning Streak
European stocks experienced a decline on Monday, weighed down by an unexpected credit rating downgrade in the United States and weaker-than-anticipated sales in China. The STOXX 600 index edged down by 0.54%, pulling back from last Friday’s seven-session peak.

US and European Treasury Yields Surge
Investor sentiment took a hit after Moody’s downgraded the US sovereign credit, voicing concerns over a ballooning national debt that has reached $36 trillion. In response, futures on major US equity indices dropped more than 1%. Longer-dated US Treasury yields climbed, with the shift also pushing Eurozone government bond yields marginally higher.
A key indicator of this evolving situation is the performance of Germany’s 10-year bond yield. Widely regarded as the benchmark for the entire Eurozone, this particular yield increased by 1.5 basis points, reaching a level of 2.60%.
Luxury Sector Weakens on Easing Chinese Sales
Luxury names were among the session’s major underperformers, reacting to April retail sales numbers from China that failed to meet expectations as they grew by 5.1% compared to the 5.9% climb observed the previous month. Shares of Hermes and Burberry both dropped by around 2%, as these European luxury groups rely heavily on China as a key growth market. The stock that fell to the bottom of the index was Italian credit company Monte dei Paschi di Siena (MPS), however, which sank over 7%. Another stand-out company was Volkswagen, which shed 3.82% of its share price value.
Contrasting the broader decline, some individual stocks stood out. BNP Paribas saw its shares rally 2.4% after unveiling plans to repurchase shares worth €1.08 billion ($1.21 billion). The stock that achieved the highest gains was Ryanair Holdings PLC, as investors reacted after its full-year profit was reported to have reached €1.61 billion, while traffic rose by 9%.





