Sept 15 (Reuters) – European shares inched lower on Tuesday, weighed down by losses in heavyweight banks, as surging oil prices and rising global bond yields dented risk appetite ahead of the U.S. Federal Reserve’s monetary policy decision later this week.
The pan-European STOXX 600 was down 0.4% at 633.3 points, as of 0707 GMT. Most major regional bourses also traded lower.
Banks were among the biggest drags, down 1.3%. Most main sectors on the STOXX 600 were lower, barring healthcare and travel and leisure.
Oil-driven inflation worries stemming from escalating tensions in the Middle East showed no signs of abating, reinforcing expectations that central banks worldwide could raise interest rates this year.
The yield on the benchmark U.S. 10-year Treasury hit the key psychological level of 5% for the first time since October 2023 on Monday.
Traders are increasingly betting on a 25-basis-point Fed rate hike. The European Central Bank raised rates for a second time last week.
Among stocks, Deutz slipped 4.5%. The firm offered up to 10% of its shares in capital increase.
(Reporting by Sudeshna Ghoshal in Bengaluru; Editing by Subhranshu Sahu)