European stocks open lower as energy stocks decline and bond yields rise

European stocks encountered a lower opening on Monday, extending their sluggish start to the year, as a rise in government bond yields and a decline in energy stocks impacted risk appetite negatively. The European STOXX 600 index recorded a 0.1 percent decline by 0815 GMT.

Yields on both European 10-year bonds and 10-year German bonds increased, mirroring the trend observed in their American counterparts, marking the third consecutive session of upward movement.

Diminishing expectations for an early US interest rate cut continued to bolster the dollar and bond yields, setting the stage for the release of the consumer price inflation report on Thursday.

Shares of European oil and gas companies witnessed a 1.4 percent decline, exerting a notable negative influence on the STOXX 600 index. This downturn was attributed to a significant reduction in oil prices by Saudi Arabia, the world’s leading crude exporter, coupled with an uptick in production by the Organization of the Petroleum Exporting Countries (OPEC).

On the economic data front, German industrial orders fell short of expectations, while exports surpassed projections in November. Investors will also closely monitor the release of November eurozone retail sales data at 1000 GMT.

Shares of Danish jewelry company Pandora experienced a 2.5 percent increase after quarterly sales exceeded expectations, offering a positive note amidst the broader market downturn.