Europe midday: Shares give up gains as investors eye bond yields

(Sharecast News) - European equities turned mixed by midday on Wednesday, as rising bond yields and the continued military stalemate in the Middle East between Iran and the US weighed on sentiment.

The pan-regional Stoxx 600 index was flat while German, Italy and France were lower. Spain bucked the trend with a 0.08% rise and Britain's FTSE 100 rose 0.17% after official data showed Britain's economy ​grew ​faster than previously thought in the second quarter.

French sentiment was hit by news that the consumer price index should rise by 3.0% year-on-year in September, up from a 2.4% rise in August due to higher energy and fuel costs.

Brent crude moved back above $103 after US President Donald Trump denied reports that he was prepared to ease sanctions on Tehran.

"Crude oil fell more than 5% yesterday, pulling the US two-year (bond) yield lower, but longer-term yields kept rising. The 30-year yield spiked past 5.60%, the highest since 2002, and the two-10-year spread widened to 35bps. The US dollar extended gains, while equities remained under pressure," said Swissquote analyst Ipek Ozkardeskaya.

"In Europe, economic data from euro area countries looked mixed yesterday. Industrial sales in Italy rose more than expected in July, but business and consumer surveys from the broader euro area hinted at weak - and weakening - confidence in September, as inflation expectations rose further on rising energy prices."

In equity news, shares in Norway's Kongsberg Gruppen jumped as the company on Tuesday signed a contract worth $1.04bn with Belgium for its National Advanced Surface-to-Air Missile Systems air defence systems.

Reporting by Frank Prenesti for Sharecast.com