European stock market indices rose broadly on Friday as easing oil prices offered relief a day after a regional selloff, but a surge in Treasury yields to multi-decade highs keeps the pressure on equity valuations. The pan-European STOXX 600 is on track for its first weekly gain in three weeks.
Italy's FTSE MIB led regional gains, rising 1.0%, while the broader Eurostoxx index climbed 0.8%. Spain's IBEX also added 0.8%, Germany's DAX rose 0.6% and the UK's FTSE 100 gained 0.5%.
Indices bounce after Thursday's selloff
The pan-European STOXX 600 rose 0.7% to 640.66 points by 0704 GMT, putting the benchmark on course for its first weekly advance after three consecutive weekly losses. Most regional bourses traded higher alongside it.
Oil eases, but Middle East risk lingers
WTI crude dropped 1.3% to $93.55 on the day, easing some of the immediate pressure on the inflation outlook. Yet investors stayed cautious, weighing the possibility of a US-Iran truce against Iranian President Masoud Pezeshkian's pledge never to surrender and the Houthi bombing of Saudi Arabia.
Energy shares were among the region's top decliners, falling 0.7%. Airline stocks, which are sensitive to fuel costs, advanced instead, with Ryanair and Lufthansa gaining more than 2% each, while the travel and leisure index rose 1.2%.
Bond yields keep pressure on
The bigger problem remains the bond market. 10-year Treasury yields surged toward 5.20% yesterday, their highest level since 2007, while 30-year yields hit 5.50% for the first time since 2004. That leaves an uncomfortable backdrop for equity valuations should yields keep climbing.
Separately, German consumer sentiment weakened more sharply than expected heading into October, as rising energy prices soured households' income outlook. Among individual movers, Finland's Konecranes climbed 5.1% after the industrial equipment maker launched a buyback programme and raised its financial targets.
The broader mood looks more like relief than outright optimism — unless bond yields stabilise, the pressure that triggered this week's selloff remains firmly in place.
Sources: Investinglive, Investing.com
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