European Shares Decline Amid Ongoing Inflation Concerns
European shares declined on Thursday as inflation concerns persisted due to elevated oil prices. The Stoxx 600 index dropped by 0.12% to close at 650.35 points, marking its seventh consecutive day of losses.
The prolonged conflict in the Middle East has dampened hopes for a resolution to energy supply disruptions through the Strait of Hormuz, causing Brent crude futures to rise by 2.2%. This surge has reignited inflation fears among investors, with Ipek Ozkardeskaya, senior analyst at Swissquote, warning that price pressures could increase in coming readings.
Despite this, shares of energy companies increased by 0.9%, while travel and leisure stocks fell by 0.7%. The US Treasury's move to boost liquidity support for long-term debt on Wednesday helped stabilize euro zone bond yields, providing some relief to markets.
In other news, German producer prices rose at their fastest pace in over three years in July, driven by higher costs for intermediate goods and energy. Meanwhile, Sweden's benchmark share index rose 0.3% after the Riksbank left its key interest rate unchanged at 1.75% as expected.
JD Sports plummeted 14.3% to the bottom of the Stoxx 600 after cutting its profit outlook due to a steeper-than-expected drop in second-quarter underlying sales, particularly in North America. On the other hand, Novonesis jumped 9.7% following better-than-expected second-quarter results and a share buyback announcement.