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European markets inch higher, led by travel stocks

LONDON — European stocks were cautiously higher on Thursday as investors appeared to brush off concerns about rampant inflation.

The pan-European Stoxx 600 inched 0.2% higher in early trade, with travel and leisure stocks adding 1.3% to lead gains while health care stocks dropped 0.5%.

Global markets have been focused on rising U.S. bond yields and earnings this week. Inflation data is also center-stage; on Wednesday, data released by the U.K. showed the inflation rate soared to a 30-year high in December hitting 5.4% with higher energy costs, resurgent demand and supply chain issues continuing to drive up consumer prices.

Inflation concerns have dominated markets around the world in recent months and investors are nervous over the U.S. Federal Reserve’s trajectory for hiking interest rates and tightening its ultra-loose pandemic-era monetary policy.

U.S. markets encountered another choppy trading session on Wednesday as investors remained cautious amid rising rates, with the Nasdaq dipping into correction territory.

This year’s turbulence in tech stocks, set off by a spike in yields in the first week of January, continued Wednesday as the 10-year U.S. Treasury yield hit a high of 1.9%. It started the year at about 1.5%. The yield on the 30-year Treasury bond fell 2 basis points to 2.167%. Yields move inversely to prices.

U.S. equities futures rose in early premarket trade while markets in Asia-Pacific were mixed on Thursday as China cut its key lending rates.

Earnings in Europe came from AB Foods, Deliveroo and Bankinter and data releases include France’s consumer climate data for January and German producer prices for December.

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— CNBC’s Tanaya Macheel contributed to this market report.

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