European stocks steady ahead of inflation data

European shares were little changed on Monday ahead of local inflation data, while investors continued to monitor developments in the Middle East war that has upended global markets.

The pan-European STOXX 600 was flat at 574.98 points as of 0809 GMT.

The defense sector led losses with a 0.8% drop. Focus is on Germany’s CPI and HICP data due later in the day to gauge the impact of the war on Europe’s largest economy.

The Middle East war has driven oil prices sharply higher, fuelling inflation fears and pushing Europe’s STOXX 600 toward its steepest monthly fall since March 2020.

The conflict showed no sign of easing, with Yemen’s Iran-backed Houthi militia firing missiles at Israel, escalating the conflict and stoking fears of more disruptions to shipping lanes. Brent Crude surged above $115 per barrel on Monday.

French central bank chief Francois Villeroy de Galhau said the European Central Bank is determined to prevent any energy-driven inflation from broadening out, but it is too early to discuss dates for possible interest rate hikes.

Among individual stocks, INWIT dropped 3.1% after Telecom Italia said it had ended a long-term lease contract with Italy’s top mast operator.

UK-listed shares of Rio Tinto firmed nearly 5% after the miner said operations at three of its four Pilbara iron ore port terminals have resumed after Tropical Cyclone Narelle swept through Western Australia’s Pilbara region, which helped lift London’s FTSE 100 0.2% higher.