Oct 22 (Reuters) - Europe's STOXX 600 index fell nearly 1% on Thursday, surrendering all of the prior session's gains as investors weighed a slate of mixed earnings reports, while higher oil prices and rising French bond yields further dampened risk appetite.
The pan-European STOXX 600 (.STOXX),was down 0.95% at 638.38 points by 0855 GMT, after gaining over 0.9% on Wednesday.
"We have some big concerns in the market, one is the situation in the Middle East... So that is sending oil prices higher and the other one is obviously bond yields," said Joost Van Leenders, senior investment strategist at Van Lanschot Kempen Investment.
"You have those risk factors and the positive factors which vary from day to day....and make for a bit of volatility in the markets," he said.
Oil prices climbed more than 2% after Houthi attacks in Saudi Arabia stoked concerns about broader escalation and supply disruption.
Energy-dependent Europe has been hit by soaring energy costs, which have stoked price pressures and weighed on the broader index.
Additionally, the yield spread between France's 10-year bond and German Bunds also hit a fresh 15-year high amid political uncertainty and protests in France.
Kicking off European bank earnings, Barclays (BARC.L),shares erased earlier losses to trade flat after the company reported a third-quarter profit miss. The lender separately said it would cut around 5,000 jobs, or 5% of its workforce this year.
Despite this, the banking index (.SX7E),fell 2.7%.
Hermes (HRMS.PA),fell 7.3% after the Birkin bag maker posted slightly weaker-than-expected quarterly revenue, with the drop weighing on the luxury index (.STXLUXP).
Nestle (NESN.S),added 1.2% after reporting better-than-expected organic sales growth for the third quarter. The food and beverage index (.SX3P),gained 0.6%, one of the few sectors trading higher.
The tech index (.SX8P),came under renewed pressure, tracking a global selloff, and was down 2.1%.
AI-related shares such as Infineon (IFXGn.DE), opens new tab, STMicroelectronics (STMPA.PA),and ASML (ASML.AS),fell between 2.8% and 3.6%.
BE Semiconductor Industries (BESI.AS),and SAP (SAPG.DE),fell 3.1% and 1%, respectively, after their quarterly earnings.
Solid earnings from Meta Platforms (META.O),on Wednesday were not enough to placate investor worries about the sustainability and profitability of massive AI spending, reviving concerns that have triggered several selloffs in AI stocks this year.
Among other stocks, UCB (UCB.BR),gained 12.2% after biopharmaceutical group upgraded its 2026 guidance on strong demand for its Bimzelx and Cimzia drugs.
Reporting by Avinash P in Bengaluru; Editing by Harikrishnan Nair and Sonia Cheema
