Eurozone Shares Rally Despite Bond Yield Fears

European shares ended the week on a high note despite rising bond yields and concerns about US government debt. The pan-European Stoxx 600 index closed at 653.64, up 0.51% for the week.

The eurozone's consumer confidence improved to -15.5 in August from -15.9 in July, according to data from the European Commission. Business activity is growing at its fastest pace this year, driven by new orders and renewed export growth, with the S&P Global flash eurozone composite PMI Output Index reaching 52.1.

However, yields on 30-year US bonds rose to 5.25%, close to pre-Treasury Secretary Scott Bessent's intervention levels. IG chief technical analyst Axel Rudolph noted that traders are skeptical about the government's ability to quell inflation and that the Treasury move is seen as a 'small plaster for a much larger wound'. Higher yields indicate investors demand more compensation for increasingly high government debt, which hit $40trln this week.

Nibe Industrier shares rose after reporting better-than-expected half-year results, while Bavarian Nordic surged on a 750m Danosh kroner buyback announcement. Oil prices edged higher, with Brent crude futures at $94 a barrel and West Texas Intermediate at $86.67.