Sept 11 - European stocks made modest gains on Friday, but the region's benchmark looked set to record its worst week since April as high bond yields and concerns about aggressive interest rate rises kept investors cautious ahead of key U.S. inflation figures.
The pan-European STOXX 600 climbed 0.3% to 637.60 points by 0716 GMT. That followed a two-month low close on Thursday, a reaction to the European Central Bank's decision to raise interest rates as expected and its warning that inflation could rise further as energy prices surge in the wake of a prolonged Middle East conflict.
Oil prices were trading above $100 a barrel for a third straight day, reinforcing inflation worries tied to energy markets. The ECB's comparatively hawkish stance has drawn calls for additional rate hikes, and government bond yields around the world have increased.
In fixed income markets, the U.S. 10-year Treasury yield remained just under the closely watched 5% mark, while the German 10-year yield stayed near multi-decade highs - developments that have helped push global borrowing costs higher and pressured risk assets.
Investor attention was focused on U.S. Consumer Price Index figures due later in the day, with market participants looking to the reading for fresh signals about the Federal Reserve's likely interest rate trajectory ahead of a monetary policy meeting next week.
On the equities front, Italian semiconductor testing firm Technoprobe rose 4.7% after its customer, TSMC, reported strong revenue for August. That stock-level move stood out amid the broader risk-off tone that has characterized the week's trading.
Market context and takeaways
- European equities registered small gains on the session but were on track for a sizable weekly decline.
- Energy-driven inflation fears and a hawkish ECB contributed to higher government bond yields and elevated market caution.
- Upcoming U.S. CPI data is a focal point for investors assessing the Federal Reserve's near-term policy path.
The tone across markets remained cautious as participants awaited clearer data signals that could influence central bank decisions and the trajectory of global yields.