European shares fell on Monday as results from Switzerland’s biggest bank, UBS, disappointed investors, and a rise in US Treasury yields put pressure on bond-proxy sectors.
The pan-European STOXX 600 was down 0.2pc by 07:20 this morning, starting a heavy week of earnings on the back foot.
UBS shares fell 3.8pc, among the top STOXX losers, despite reporting first-quarter earnings ahead of analysts’ estimates.
The bank struck a cautious note for the coming quarter, and traders also pointed to its CET1 ratio of capital requirements slightly falling short of expectations.
Consumer staples stocks, which investors have held as proxies to bonds for their stable revenues and income stream, took the most points off the index after US yields hit their highest level since January 2014.
Nestle, AB InBev and Unilever were among the worst-hit, falling 0.5 to 1.6pc.
Reckitt Benckiser shares tumbled 3.9pc, dented by a price target cut from JP Morgan.
A spate of broker rating cuts bruised German retailer Metro , down 6.7pc at the bottom of the STOXX. Helvea Baader, JP Morgan, Kepler Cheuvreux and Bernstein all cut their price targets on the stock, while HSBC cut it to “reduce” from “buy”.
First-quarter results helped propel Rotork shares up 7pc to the top of the index, however.
M&A news also rumbled on. Shares in Swiss banking software business Temenos gained 4.9pc after it said it would not raise its bid for Fidessa.
The British financial trading systems firm ditched Temenos in favour of a £1.5bn deal with rival bidder Ion.