European shares dip as banks hit over 3-month low, oil prices weigh

European stock markets declined on Thursday, with banks hitting a more than three-month low and soaring oil prices fanning concerns over potentially higher inflation dampening economic growth. The pan-European STOXX 600 index slipped 0.9% to 624.24 points at 0723 GMT. Banks in Europe plummeted nearly 2%, with Deutsche Bank, Banco Santander, Societe Generale, and Unicredit all falling for a second consecutive day as euro zone bond yields approached recent highs.

Oil prices surged over 3% due to ongoing worries about supply from the critical Middle East producing area, and a hurricane threat to US offshore operations led to production reductions. Fed policy meeting minutes revealed divided opinions among officials regarding the necessity for additional rate hikes. The focus now shifts to Europe, where markets will scrutinize the European Central Bank's latest meeting statements for insights into the policy outlook.

Notable speakers include various ECB and Fed officials, as well as Bank of England Governor Andrew Bailey. Individually, Bavarian Nordic rose 2.9% following the Danish biotech company's upward revision of 2026 revenue guidance and EBITDA margin projections.