Europe midday: Shares slide as oil surges past $105, bond yields rise

(Sharecast News) - European shares were sharply lower on Thursday as oil prices rose amid more attacks on shipping in the Strait of Hormuz while bond yields also continued to increase.

The pan regional Stoxx 600 was down 0.97% to 624 at 1049 GMT with all major bourses lower.

Brent crude rose 4.86% to $105 a barrel after attacks on vessels in the past week increased as Tehran retaliated against more concerted efforts by tankers to run its blockade of the key waterway.

The latest attack came `on Wednesday, when a tanker was hit by multiple projectiles off the north coast of Qatar, causing casualties, according to the United Kingdom Maritime Trade Operations which monitors shipping traffic.

Meanwhile, US media reported that US President Donald Trump and his national security team had discussed the possibility of resuming large-scale US military operations in Iran in the coming weeks, including potential strikes ahead of next month's midterm elections.

Oil prices also rose in response to a squeeze on production in the Gulf of Mexico, after the tropical storm Isaias strengthened to become the first hurricane of the Atlantic season.

Shell and Chevron both said they were shutting down production as the storm approached the region, forecast to make landfall on Friday or Saturday.

US stocks declined on Wednesday, with the S&P 500 and Nasdaq retreating from all-time highs as bond yields hit a fresh 24-year high, while investors digested minutes from the last Federal Reserve meeting suggesting policy makers could wait until December before hiking rates again.

The S&P 500 and Nasdaq both fell 0.2%, pulling back from record highs reached the previous session, while the Dow fell 0.7%.

French government bonds remained under pressure, with the 10year OAT yield up 6 basis points at 4.931%, leaving it just below last week's 24year high of 4.994%. Concerns over France's rising debt and expanding public spending continued to weigh on sentiment.

The benchmark German 10year Bund yield added 2 basis points to 3.504%, extending the recent drift higher across core eurozone debt markets as investors demanded greater compensation for longdated sovereign risk.

In the US, the 10year Treasury yield climbed 5 basis points to 5.331%, reflecting persistent pressure across global fixedincome markets.

In economic news, Germany's exports slipped by an unexpected 0.8% in August, according to official data published on Thursday, as weaker demand across key markets weighed on monthly trade flows.

After seasonal and calendar adjustment, outbound shipments continued to lose momentum following a modest rise in July. Analysts had forecast a 0.6% rise.

On the equities front, shares in Tesco rose as the UK supermarket chain lifted annual guidance after interim earnings jumped 6.5%.

Argenx slumped after a late-stage trial for its Sjögren's disease treatment failed to meet targets.

Reporting by Frank Prenesti for Sharecast.com