European markets cautious amid talk of further Russia sanctions

LONDON — European markets were mixed on Monday as Western powers prepare more sanctions against Russia following allegations of civilian massacres in Ukrainian towns.

The pan-European Stoxx 600 fluctuated either side of the flatline in early trade but was up 0.3% by late morning. Health care stocks added 1.2% while industrials shed 0.5%.

Ukraine’s top prosecutor said 410 bodies had been found in towns recaptured from retreating Russian forces around Kyiv as part of an investigation into possible war crimes, while Ukrainian President Volodymyr Zelenskyy accused Russia of genocide. Russia has denied allegations that its forces killed civilians in Bucha, 23 miles northwest of Kyiv.

The European Union plans to introduce fresh sanctions against Moscow in the wake of the new reported atrocities, with European Council President Charles Michel announcing on Twitter that “further EU sanctions & support are on their way.”

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Shares in Asia-Pacific were mostly higher on Monday, with Hong Kong’s Hang Seng index leading gains as shares of Chinese tech climbed after a recent signal by Chinese authorities of progress toward resolving an audit dispute, which had threatened U.S.-listed Chinese firms with delisting.

Stateside, stock futures pointed fractionally lower in early premarket trade.

In terms of individual share price movement in Europe, German takeout company Delivery Hero surged more than 10% after launching a debt financing syndication equal to around $1.55 billion.

At the bottom of the Stoxx 600, Danish shipping giant A.P. Moeller-Maersk slid more than 6% after announcing that the CEO of subsidiary APM Terminals would retire on June 30.

A stark repricing of bond markets in recent weeks has also been identified as a key driver of stock markets, and Luke Barrs, head of fundamental equity for EMEA at Goldman Sachs Asset Management, told CNBC on Monday that the bond market was serving as a “discounting mechanism.”

“If you look at those higher growth, longer term secular themes that we have been very attracted to, clearly those are long duration assets, so any time that interest rates are going higher and discount rate starts to become more significant a bearing on the valuation of those names, so you’ve seen a little bit of a retrenchment,” Barrs told CNBC’s “Street Signs Europe.”

“We actually think the market has overreacted to some of those concerns, and our view at the moment is that innovation and some of those innovative areas of the market are now oversold.”

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