European Shares Rise Despite Rising Bond Yields, Inflation Fears Persist

European shares rose modestly by midday on Friday, bucking expectations of a sell-off amidst concerns over rising bond yields and inflation fears.

The Stoxx 600 index gained 0.16% to 1055 GMT, with major regional bourses also posting gains. Yields on long-dated US bonds climbed back to 5.25%, near the level before Treasury Secretary Scott Bessent announced plans to step in and buy more government debt.

Investors remain skeptical about the effectiveness of these measures, viewing them as an attempt to shift attention away from growing government debt, which surpassed $40 trillion this week, or over 6% of GDP. 'The Treasury move is being seen as a small plaster for a much larger wound,' said Richard Hunter, head of markets at Interactive Investor.

The largest technology firms are competing with governments for investors' cash, fueling higher yields and adding to the economic uncertainty. Oil prices edged up, with Brent crude futures rising 0.02% to $93.80 per barrel and West Texas Intermediate futures increasing 0.06% to $86.88.