European shares traded flat as rising oil prices and inflation concerns counteracted gains in the bond market. Brent crude climbed to $92 a barrel, impacting travel and leisure stocks, while Germany's borrowing costs hit a 15-year high.
Rising oil prices and inflation concerns are weighing on European equities, overshadowing stabilization in the bond market and potentially impacting consumer spending and corporate profitability.
European shares traded flat on Thursday, with gains in the bond market being counteracted by concerns over rising oil prices and inflation. The pan-European STOXX 600 index was steady at 651.44 points as of 0708 GMT.
Brent crude oil prices climbed approximately 0.6% to around $92 a barrel, leading to a 0.4% drop in travel and leisure stocks. Basic resources stocks experienced the largest sectoral decline, falling 0.7%, as gold prices retreated on profit-taking following a rally that was fueled by lower bond yields and a weaker dollar.
The U.S. Treasury intervened to support the bond market by increasing its purchases of long-dated debt, a move that came after yields had climbed to multi-year highs. Global bond markets had faced pressure throughout the week due to investor concerns about increasing government debt, with higher oil prices exacerbating these worries.
Germany's DAX index underperformed its regional peers. The country's borrowing costs reached a 15-year high, reflecting increased defense spending requirements and mirroring a broader trend of rising bond yields across major economies.
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