European shares muted as higher oil prices counter bond recovery

European stock markets remained relatively stagnant on Thursday, as worries over rising oil prices and inflation partially countered the gains in global bond markets following a US Treasury intervention. The pan-European STOXX 600 index remained steady at 651.44 points at 0708 GMT. US President Donald Trump expressed concern about the economic ramifications for any nation providing "any type of assistance to Iran" amid the ongoing conflict with Tehran, which the United States and Israel have been engaged in for nearly six months.

Brent crude oil prices rose by approximately 0.6% to roughly $92 per barrel. Businesses in the travel and leisure sectors experienced a 0.4% decline, as the increase in oil prices raised questions about fuel expenses. The basic resources sector faced the steepest drop, falling by 0.7%, as gold prices fell due to profit-taking after a surge driven by lower bond yields and a weaker US dollar.

In an effort to bolster the bond market, the US Treasury increased its purchases of long-dated debt following a surge in yields to multi-year peaks. Global bond markets experienced pressure this week as investors expressed concerns about growing government debt, with the recent rise in oil prices exacerbating these concerns. The German DAX lagged behind its regional counterparts, as the country faces the need for increased defense spending, coinciding with a wider increase in bond yields across major economies.