European Stocks Start September with Losses Amid Rising Bond Yields
European stocks began September on a gloomy note due to rising government bond yields. The pan-European STOXX 600 slipped 0.2% to a more than one-week low by 0815 GMT. Britain's FTSE 100 fell 0.5%, while Germany's DAX and France's CAC 40 moved in opposite directions, with the former dropping 0.5% and the latter gaining 0.2%. The surge in energy prices, coupled with hawkish remarks from Federal Reserve Chair Kevin Warsh last week, has prompted investors to price in interest rate hikes.
Germany's 30-year government bond yield rose to a fresh 15-year high, while France's 30-year yield climbed anew to touch its highest since 2008. Euro zone inflation figures for August are expected later in the day, which could offer fresh clues on the interest rate trajectory. The recent selloff in stocks has shaved 2% off the STOXX 600 index.
Energy stocks in Europe rose 1.4%, while Brent crude traded around $92 a barrel. Reckitt Benckiser Group added 4.2% after a jury favored the company in its trial over claims that its products for premature babies could cause a deadly bowel disease. Shares of Air Liquide climbed 2.9% after media reports said activist investor Elliott Investment Management has built a stake in the French multinational company.