Europe's STOXX 600 slips on inflation fears

By Tharuniyaa Lakshmi and Utkarsh Hathi

Aug ‌20 (Reuters) - European shares ​inched ​lower on Thursday, as elevated oil prices kept inflation worries alive, while a recovery in global bonds after a U.S. Treasury intervention helped limit losses.

The ‌pan-European STOXX 600 closed 0.12% lower at 650.35 points, extending its ⁠losing streak to a seventh straight session, its longest since September 2023.

An impasse in U.S.-Iran talks to ‌end the six-month Middle East ‌conflict has dampened hopes for energy supplies to resume through the Strait of Hormuz, pushing oil prices above $90 a barrel in recent days and rekindling inflation fears ​among global investors.

"Price pressures could move higher in the coming readings as the July retreat in energy prices proved temporary. With no easy resolution in the ⁠Middle East, inflation risks remain tilted to the upside," said Ipek Ozkardeskaya, senior analyst at Swissquote.

Shares of energy companies ​rose 0.9% as Brent crude futures climbed 2.2%, but the higher oil prices sent travel and leisure stocks down 0.7%.

There was relief in ​markets, however, that euro zone bond yields steadied ‌on Thursday from multi-year highs following the U.S. Treasury's move on Wednesday to boost liquidity support for long-term debt.

JD SPORTS PLUNGES

France's ⁠benchmark CAC 40 underperformed regional peers, down 0.6% as luxury stocks slipped. Gucci parent Kering and Louis Vuitton parent LVMH slid 3.6% and 2.8% respectively.

On the macro front, German producer prices ⁠rose at their fastest pace in over three years in July, data showed, driven by higher costs ​for intermediate goods and energy.

Sweden's benchmark share index rose 0.3% after the Riksbank left its key interest rate unchanged at 1.75% as expected and signalled it stood ready to tighten policy if price ‌pressures accelerate.

Among individual movers, JD Sports plunged 14.3% to the bottom of the STOXX 600 after the British sportswear retailer cut ‌its profit outlook following a steeper-than-expected drop in second-quarter underlying sales, particularly in North America.

Novonesis ⁠jumped 9.7% after the Danish biosolutions ‌maker reported better-than-expected second-quarter ​results, raised its full-year guidance and announced a share buyback.

(Reporting by Tharuniyaa Lakshmi and Utkarsh Hathi in Bengaluru; Editing by Mrigank Dhaniwala and ‌Susan Fenton)

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