Oil Price Surge Weighs on European Stocks Ahead of ECB Rate Decision
European stocks closed flat on Monday as rising oil prices fueled inflation worries, offsetting stronger-than-expected euro zone economic data. The pan-European STOXX 600 ended at 649.9 points.
The Swiss main index dropped 0.8% after a disappointing day for heavyweight Novartis, which fell 3.2% following the failure of its cholesterol drug in a closely watched study.
Germany's DAX fell 0.2%, weighed down by the country's far-right AfD party topping a state election in Saxony-Anhalt with 44% of the vote over the weekend, despite falling short of an absolute majority.
Data offered some support for the regional economy, however, as euro zone investor morale rose to its strongest reading in more than four years in September, and second-quarter GDP expanded 0.6% from the previous quarter and 1.2% year on year, both above expectations.
The higher oil prices have also fueled inflation concerns, triggering a global bond selloff last week and strengthening the case for further policy tightening ahead of Thursday's European Central Bank rate decision.