Sept 2 (Reuters) – European shares hovered near a one-month low on Wednesday, pressured by a spike in bond yields as escalating tensions in the Middle East stoked worries about energy-induced inflation.
The pan-European STOXX 600 was flat at 647.87 points by 0714 GMT, with Germany’s DAX down 0.2%.
The U.S. and Iran were back on a war footing this week, which sent Brent crude prices above $95 a barrel to a six-week high and fanned inflation concerns against the backdrop of elevated government debt.
The yield on German 10-year bonds hit its highest since April 2011, while investors see a near 40% chance that the European Central Bank’s deposit rate could hit 3% by March 2027, up from a 25% chance last week, LSEG-compiled data showed.
Among individual stocks, Lottomatica slid 6.3% and was temporarily halted after the Italian betting firm said it will take over Spain’s Cirsa to create a combined entity. The media sector lost 1.5% and led declines.
Telecom stocks led gains, with Nokia Oyj up nearly 2% after index provider STOXX said the Finnish telecom equipment maker will rejoin the Euro STOXX 50.
(Reporting by Sudeshna Ghoshal and Johann M Cherian in Bengaluru; Editing by Saumyadeb Chakrabarty)