European Stocks Close Lower as 'Trump Rally' Takes a Breather

European stocks traded lower into the close Thursday as investors put the brakes on a two-day U.S. election rally amid a worrying rise in global bond yields. 

The region's Stoxx 600 index, the broadest measure of equity performance, fell 0.4% by the close of trading, but has still booked a gain of 1.95% since the start of the week amid a global stock market rally fuelled by the election of Donald Trump early Wednesday.

Britain's FTSE 100 index, having held gains through much of the morning session, shed more than 80 points, or 1.2%, into the close as weak consumer stocks offset gains for banking and mining stocks. Germany's DAX index closed 0.31% lower while France's benchmark, the CAC-40, ended the day down 0.44%

The equity market losses flank one of the worst days of the year for global bond markets, as U.S. Treasury yields rise past January highs on bets on higher interest rates and faster inflation in the wake of President Elect Donald Trump's $9.5 trillion stimulus and infrastructure plans. 

Benchmark 10-year German bund yields rose more than 12 basis points Thursday to trade at 0.32%, the highest since March, while similar maturity government bonds from Italy hit a 15-month high of 1.91%. 

In London, the session's biggest gainer was Antofagasta (ANFGY) whose shares rose 11.3%, to a one-year high of 720 pence each. The London-listed Chilean miner cautioned only two weeks ago that its copper production would be at the lower end of guidance this year, and that next year's would fall. However, global copper prices rose sharply in London, rising to a 16-month high, as traders bet on steep infrastructure spending gains from a Trump Presidency.

AstraZeneca Plc (AZN)  was a big mover on the downside as it shares fell nearly 4% after the company said sales of its blockbuster Crestor drug declined sharply in the face of generic competition, extending the three-month decline past 13% outpacing an 8.2% decline for the FTSE 350 Healthcare Index.

Around the region, however, the largest European lenders, and specifically those with significant U.S. exposure, led equity benchmarks throughout the session as the Stoxx 600 Europe Bank Index hit a 7.5 month high of 159.21.

Trump's election references to "getting rid" of Dodd-Frank reforms in order to get banks lending suggest his administration will at least slow the pace of new Wall Street regulation and give the industry its first chance to expand in the post-crisis era.

Deutsche Bank (DB)  was one of the top advancers in Germany, with shares up 5.22% to €14.04 Britain's Barclays Plc (BAR)  rose 5.66% to 203.6 pence each, the highest since January 13, before paring gains to 200.7 pence and Credit Suisse (CS) added 4.3% to trade at Sfr13.54.

Away from equities, the pound continued its curious rise against the U.S. dollar, advancing around 1% to trade at 1.2527, the highest level since the 'flash crash' of October 7. The rise comes against broader gains for the dollar, which rose 0.43% against a basket of global currencies to trade as high as 99.06, a level not seen since early January. 

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