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European equity markets moved lower on Tuesday as higher oil prices and rising government bond yields increased investor attention on inflation and the outlook for interest rates.
Sovereign borrowing costs rose across Europe as a global bond sell-off continued. Germany’s 30-year government bond yield reached a fresh 15-year high, while the equivalent French yield climbed to its highest level since 2008.
Investors were assessing developments in the Middle East while awaiting U.S. labour market data later this week for further indications on the Federal Reserve’s monetary policy outlook.
Higher energy prices have also increased expectations for tighter monetary policy in Europe. Markets are assessing the possibility of a 25-basis-point interest-rate increase from the European Central Bank at its September 9-10 meeting, although the ECB has not yet made its decision.
DAX leads declines across European markets
Germany’s DAX fell 1%, while the UK’s FTSE 100 declined 0.6% and France’s CAC 40 was down 0.2%.
In London, Ashtead Technology Holdings (LSE:AT.) shares fell after the subsea equipment rental specialist reported a 7% decline in first-half EBITA.
Frasers (LSE:FRAS) also traded lower after the retailer announced that it was reviewing its support for Hugo Boss supervisory board Chair Stephan Sturm.
AstraZeneca (LSE:AZN) declined despite reporting positive high-level results from the SANOVO Phase III trial in China.
Advertising group WPP (LSE:WPP) also moved lower following an announcement that it plans to eliminate up to 1,000 additional positions by the end of 2026.
Elsewhere, Partners Group Holding (TG:P2H) shares fell after the Swiss private equity firm replaced chief executive David Layton following disruption affecting its funds.
Energy shares rise as Brent approaches $92
Energy companies were among the areas of the market moving higher as Brent crude approached $92 a barrel.
TotalEnergies (EU:TTE), BP Plc (LSE:BP.) and Shell (LSE:SHEL) gained as investors continued to assess the potential for prolonged disruption to energy flows through the Strait of Hormuz.
Higher crude prices can support revenue expectations for oil producers, although individual share-price movements can reflect multiple company-specific and market factors.
German fragrance, flavour and beauty ingredients company Symrise (TG:SY1) also advanced after agreeing to sell AmeriTerpenes LLC, its terpene ingredients business, to private equity investor Mutares SE & Co. KGaA.
European markets remained focused on movements in government bond yields, energy prices and developments in the Middle East, alongside upcoming U.S. labour market data and expectations for monetary policy on both sides of the Atlantic.