Europe open: Shares edge ahead; France rallies despite rising bond yields

(Sharecast News) - European shares edged ahead at the open on Wednesday with French equities rallying after Tuesday's sell off amid political turmoil and surging bond yields.

The pan-regional Stoxx 600 index was up 0.08% to 639 at 0734 GMT. France's CAC 40 gained 0.27% in early deals despite a 4.2 basis point rise in 10-year government bond yields to 4.957%.

Shares in French supermarket giant Carrefour plunged as the company on Tuesday lowered its earnings outlook after revealing that 70 its premises had been hit by the rioting and looting by protestors last weekend.

In the UK, shares fell as official data showed a jump in inflation to 3.5% last month driven by higher fuel prices on the back of US President Donald Trump's war with Iran.

Oil prices remained elevated as efforts to break the stalemate between the warring countries went nowhere - again.

Efforts to revive negotiations have continued, with Qatar and Pakistan maintaining diplomatic contacts between Washington and Tehran, but Iranian officials have signalled that meaningful progress remains unlikely unless the US addresses Tehran's key demands, leaving talks at an impasse.

"So we're back to square one. The price moves are driven by nothing more than empty hope, with considerable uncertainty remaining," said Swissquote analyst Ipek Ozkardeskaya.

US crude slipped below $100 a barrel after swinging between $96 and $103 in yesterday's session, while Brent was just under $110.

"Higher oil continues to pressure inflation expectations, pushing yields higher. European debt stress adds another layer of pressure. The spread between French and German 10-year yields spiked past 152 basis points yesterday, returning to levels seen during the European sovereign debt crisis-with no easy fix in sight either," Ozkardeskaya added.

In equity news, shares in Randstad jumped after the Dutch recruitment firm's third-quarter results beat expectations.

Adidas jumped after the sportswear giant yesterday raised its full-year profit guidance on the back of record third-quarter results.

Reporting by Frank Prenesti for Sharecast.com