Europe Stocks Hit by Fed Rate Timing Fear

        European stocks fell in early trading on Monday, tracking a selloff in the U.S. after Friday's positive jobs report further fueled expectations the Federal Reserve will raise interest rates this year.
        The Stoxx Europe 600 was 0.7% lower in early trade, having closed at a fresh seven-year high on Friday. Europe's stock markets have racked up strong gains so far this year after the European Central Bank in January announced a massive bond-buying stimulus program, which begins Monday.
        But on Monday, investors focused on the prospect of tighter monetary policy in the U.S., where ultra-low interest rates have been a key support for global stock markets in recent years.
        The U.S. economy created more jobs than expected in February, data showed on Friday. The latest sign of buoyancy in the world's largest economy "has finally convinced markets" the Fed will raise rates as soon as June, said UBS economist Paul Donovan.
        The figures sparked a 1.4% selloff in the S&P 500, which was echoed in Europe and Asia. Germany's DAX index fell 0.7%, France's CAC 40 lost 0.9%, while the U.K.'s FTSE 100 was down 0.7%.
        The U.S. data also boosted the dollar on Friday, with the euro hitting an 11-year low against the buck. The common currency rebounded slightly on Monday, climbing 0.4% to $1.0883.
        Markets also await Monday's meeting of eurozone finance ministers, to discuss reform proposals submitted last week by the Greek government as it bids to unlock further financial aid from creditors.
        Still, a strong dollar and ECB action, not a fresh round of panic about a Greek exit from the eurozone, are largely behind the recent euro weakness, said Commerzbank currency strategist Ulrich Leuchtmann.
        That means that any agreement between Greece and its creditors is unlikely to spark a major rebound for the euro, he said.
        In bond markets, yields in the eurozone hovered close to record lows as investors geared up for ECB stimulus. Low yields reflect high prices.
        In commodities, Brent crude oil was down 0.5% at $59.41 a barrel. Gold climbed 0.7% to $1,172.80 an ounce.
        Write to Tommy Stubbington at tommy.stubbington@wsj.com
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        (END) Dow Jones Newswires

        March 09, 2015 05:40 ET (09:40 GMT)

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