European Stocks Rebound Amid Inflation Fears, ECB Rate Hike Uncertainty

European stocks rebounded on Friday after a sharp selloff driven by a bond market rout, while investors parsed inflation data for fresh clues on monetary policy.

Data showed euro zone inflation surged more than expected in September and is likely to rise further in the coming months, keeping pressure on the European Central Bank to raise interest rates again.

The pan-European STOXX 600 rose 0.6% to ​630.47 points by 1005 GMT after touching its lowest in more than three months on Thursday.

Higher interest rates combined with elevated inflation are a negative for equities, but whether equity markets will react badly depends on how long investors feel the problem will last, said Michael Field, chief equity strategist at Morningstar.