* Tech stocks slump 3.6% to a near three-month low
* EU banks only sector to rise
* Euro zone investor morale inches up
* Atos plunges on profit warning
Jan 10 (Reuters) - European shares posted their biggest
one-day drop since late November on Monday as rising bond yields
weighed on the heavyweight technology sector, while the rapid
spread of the Omicron COVID-19 variant also dented sentiment.
The pan-European STOXX 600 closed 1.5% lower, with
technology stocks tumbling 3.6% to a near three-month
low. Losses were spread out across most European sectors.
Rising bond yields in Europe and the United States were the
main driver behind the stock rout, as investors awaited an end
to pandemic-era liquidity measures in the wake of surging
"Inflation is concentrating minds of investors in Europe...
which is piling the pressure on the ECB (European Central Bank)
to tighten monetary policy," said Susannah Streeter, senior
investment and markets analyst at Hargreaves Lansdown.
December inflation rose to a record high of 5% for the
currency bloc, data showed last week.
On Monday U.S. 10-year yields hit a two-year high, while
Germany's 10-year yields briefly hit their highest since May
2019. Investors have begun pricing in rate hikes by the ECB
later this year.
Regional bank stocks, which tend to benefit from
higher lending rates, were the sole gainers, rising 0.2%.
Credit Suisse rose 1.3% after traders cited media
speculation about a possible sale or merger of the embattled
The STOXX 600 kicked off January with a rally to record
highs but has hit choppy ground recently as worries around
inflation, COVID-19 and the central bank tightening cycle cloud
the equities outlook for 2022.
But a survey showed on Monday that investor morale in the
euro zone had risen this month as momentum is not expected to
slow despite the new variant. The effect of rising COVID-19
cases is expected to be felt in January.
Carige rose 1.0% after a report said BPER Banca
, Italy's fifth-largest bank, had improved its offer to
prevail over rival suitor Credit Agricole Italia.
BMW gained 1.7% after Goldman Sachs upgraded the
German car giant to "buy" from "hold," saying the consolidation
of the BMW Brilliance Automotive joint venture should result in
earnings growth this year and next.
French diagnostics company Eurofins Scientific
dipped 4.7% after Jefferies downgraded the firm to "hold" from
"buy," saying COVID-19 testing has lifted the stock towards its
French technology consulting company Atos slumped
16.8% to the bottom of the STOXX 600 after issuing a profit
warning that reflected customer deal delays and pressured
margins at its hardware and software resales unit.
(Reporting by Anisha Sircar in Bengaluru; Editing by Subhranshu
Sahu, Ramakrishnan M. and Jan Harvey)