Global Market: European shares muted as bond yields surge on inflation concerns

European shares were little changed on Tuesday as a renewed selloff in government bonds weighed on sentiment, while gains in energy stocks and positive corporate developments helped limit losses, Reuters reported.

The pan-European STOXX 600 was up 0.04% at 651.35 points by 0729 GMT.Britain's FTSE 100 fell 0.4% as trading resumed following Monday's bank holiday. Germany's DAX slipped 0.2%, while France's CAC 40 gained 0.4%.

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Bond yields across major markets climbed sharply, with investors increasingly concerned that higher oil prices could reignite inflation and force central banks to keep interest rates elevated for longer.

The Germany's 30-year government bond yield rose to a fresh 15-year high, while France's 30-year yield climbed to its highest level since 2008.

Renewed fighting in the Middle East has pushed energy prices higher, adding to inflationary pressures. Hawkish comments from Federal Reserve Chair Kevin Warsh last week have also contributed to expectations of tighter monetary policy.

Markets were pricing in an interest-rate hike by the European Central Bank in September, according to LSEG data cited by Reuters. Investors were awaiting euro zone inflation data for August later on Tuesday for further clues about the ECB's policy outlook.

Energy stocks were among the strongest performers, rising 1.4% as Brent crude traded around $92 a barrel.

Among individual stocks, Reckitt Benckiser Group jumped 5.2% after a jury ruled in favour of the company in a trial involving allegations that it failed to warn that products for premature babies could cause a potentially fatal bowel disease.

Air Liquide shares gained 3.8% following media reports that activist investor Elliott Investment Management had built a stake in the French industrial gases company.

Gains in select stocks supported European equities, but the sharp rise in bond yields kept investors cautious as markets assessed the potential impact of higher energy costs on inflation and interest rates.

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