Rising Yields, Downbeat Energy Stocks Cause European Shares to Go Lower

London: In European markets today, the rising government bond yields and downbeat energy stocks contributed to a 0.3% decline in the pan-European STOXX 600, extending the previous week’s 0.5% drop.

Energy shares, particularly oil and gas stocks, fell 1.7%, with Shell losing 2.0% after announcing potential impairment charges of $2.5 billion to $4.5 billion for Q4.

The strengthening dollar and rising government bond yields, fueled by diminishing expectations of an early U.S. rate cut, influenced market sentiment. Analysts noted that economic growth responds positively to rate hikes, but achieving central banks’ inflation targets may take time.

The upcoming U.S. fourth-quarter earnings season and Thursday’s inflation report are expected to shape market dynamics. German industrial orders and exports data showed mixed results, with Germany’s DAX 40 remaining nearly flat.

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