Europe's STOXX 600 closed lower on Thursday as elevated oil prices reignited inflation worries, extending the index's longest losing streak since 2023. A bond-market recovery, tied to a U.S. Treasury liquidity move, limited the damage.
The pan-European STOXX 600 closed 0.12% lower at 650.35 points, extending its losing streak to a seventh straight session — its longest since September 2023.
Oil prices rekindle inflation fears
An impasse in U.S.-Iran talks aimed at ending the six-month Middle East conflict has dampened hopes for energy supplies to resume through the Strait of Hormuz, pushing oil prices above $90 a barrel in recent days. As a result, inflation fears have returned among global investors.
According to Ipek Ozkardeskaya, senior analyst at Swissquote: "Price pressures could move higher in the coming readings." With no easy resolution in the Middle East, she said, inflation risks remain tilted to the upside.
Shares of energy companies rose 0.9% as Brent crude futures climbed 2.2%, but the higher oil prices sent travel and leisure stocks down 0.7%. Bond markets, however, offered some relief: euro zone yields steadied from multi-year highs after the U.S. Treasury's Wednesday move to boost liquidity support for long-term debt.
Luxury stocks drag France lower
France's benchmark CAC 40 underperformed regional peers, down 0.6% as luxury stocks slipped. Gucci parent Kering and Louis Vuitton parent LVMH slid 3.6% and 2.8% respectively.
Meanwhile, on the macro front, German producer prices rose at their fastest pace in over three years in July, driven by higher costs for intermediate goods and energy. Sweden's benchmark share index bucked the regional trend, rising 0.3% after the Riksbank left its key interest rate unchanged at 1.75% as expected and signalled it stood ready to tighten policy if price pressures accelerate.
JD Sports plunges, Novonesis jumps
Among individual movers, JD Sports plunged 14.3% to the bottom of the STOXX 600 after the British sportswear retailer cut its profit outlook following a steeper-than-expected drop in second-quarter underlying sales, particularly in North America. Novonesis moved the other way, jumping 9.7% after the Danish biosolutions maker reported better-than-expected second-quarter results, raised its full-year guidance and announced a share buyback.
Source: Investing.com
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