European shares erase gains on luxury, consumer staples drag; UBS glows
By Ankika Biswas and Shashwat Chauhan
(Reuters) -European shares were flat on Thursday as declines in consumer staples and luxury stocks outweighed gains in real estate and financials including UBS, while a raft of economic data gave a mixed picture of the euro zone.
The pan-European STOXX 600 closed 0.2% lower, having risen as much as 0.5% intraday.
Recent gains have helped the benchmark stave off its worst monthly performance so far this year, but it is still set to log a decline of nearly 3%.
Swiss bank UBS Group jumped 6.1%, hitting its highest level since 2008, on a sweeping plan to cut over $10 billion in costs, axing 3,000 jobs in Switzerland after taking over its stricken rival Credit Suisse.
The broader financial services index added 1.5%, hitting a one-month high.
Rate-sensitive real estate stocks gained 1.6%, while euro zone bond yields fell to a one-week low after data on the bloc's inflation revealed a mixed picture.
Euro zone inflation held steady this month while underlying price growth fell as expected, but remained above the ECB's target, while past data on business activity have pointed to a darkening economic outlook.
«We may be past the peak in core services inflation as pressure from tourism-related sectors subsides and as favourable base effects from travel subsidies take effect...,» said Gurpreet Gill, macro strategist, global fixed income at Goldman Sachs Asset Management.
«If policymakers pass on a 10th consecutive rate rise in September, whether they choose to lift rates in October, to a 4% terminal rate, will depend on the trajectory of inflation between now and then.»
ECB policymakers kept a September hike on the table while raising rates in July, although some of them argued that another move
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