The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, September 28, 2023. REUTERS/Staff/File photo Acquire Licensing Rights
Oct 13 (Reuters) – European shares faltered on Friday, tracking risk-aversion across global markets and as rising energy prices added to concerns about persistent inflationary pressures, though the benchmark index gained on the week.
The pan-European STOXX 600 index (.STOXX) fell 1.0%, with technology (.SX8P) and travel and leisure (.SXTP) sectors leading losses.
Global shares slipped while safe-haven assets, such as gold and U.S. Treasuries, rose as traders cut back on risk as conflict in the Middle East intensified.
Countries urged Israel on Friday to hold off on plans for an all-out assault on northern Gaza, where more than a million civilians largely defied its order to evacuate.
Oil & gas companies (.SXEP) jumped 1.2%, hitting a nine-year high as oil prices spiked more than 3% after the U.S. tightened its sanctions programme against Russian crude exports, raising supply concerns.
But the surge in oil prices fuelled inflation concerns for the wider equity market.
“Europe is very cyclical market and an energy importer. So when we see energy price being so high, that’s bad for equities,” said Anthi Tsouvali, multi asset strategist at State Street Global Markets.
Despite market volatility in recent weeks, stocks have largely remained supported on hopes that the major central banks are near the end of their monetary tightening cycle, with the STOXX 600 snapping its three-week losing streak to gain nearly 1% for the week.
Meanwhile, European Central Bank President Christine Lagarde said euro zone inflation has started to return to its 2% target and the central bank remains ready to tighten policy further if that becomes necessary.
Euro zone long-dated yields posted their biggest weekly fall since mid-July.
Novo Nordisk (NOVOb.CO) gained nearly 1% after the Danish drugmaker raised its full-year sales and operating profit for the third time this year.
The stock pushed the OMX Copenhagen 20 (.OMXC20) 0.2% higher, among few gainers across the European regional markets.
Among other stocks, Sartorius AG (SATG.DE) tumbled 11.4% after the Franco-German lab supplies maker lowered its full-year forecast for sales and adjusted earnings margin on the back of lower volume expectations and product mix effects.
St. James’s Place (SJP.L) tumbled 21.8% following media reports the British wealth manager is under pressure from regulators to overhaul its client fee structure to comply with UK’s new Consumer Duty rules.
British American Tobacco (BATS.L) dropped 3.5% after the U.S. health regulator blocked the sale of six flavours of main vape brand, Vuse Alto, including the menthol flavour that makes up a large portion of its sales.
Reporting by Sruthi Shankar, Siddarth S and Shristi Achar A in Bengaluru; Editing by Sonia Cheema, Saumyadeb Chakrabarty and Jane Merriman
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