Europe open: Investors still fret over BoE's gilt complex

European shares opened lower for the seventh consecutive session on Thursday as turmoil in the UK bond market continued to dominate sentiment, with fears of that it could undermine financial stability globally, while investors also eyed crucial US inflation data later in the day.

The pan-European Stoxx 600 index was down by 0.6% in early deals. The mood was also dampened further after more Russian missile strikes on Ukrainian towns.

Markets are looking for any sign of stability in the UK gilt markets after a day when British Prime Minister Liz Truss said she would not cut public spending, despite the government pledging billions in unfunded tax cuts.

Meanwhile, the Bank of England said it would stop its emergency bond-buying on Friday as it adopted a “see who blinks first” approach to the pension funds dumping government debt to meet cash calls from lenders - a panic sell sparked by the government's ill-received tax-cutting agenda.

"The Bank of England bought £4.4bn of gilts on Wednesday from investors, accelerating its intervention into the disorderly government borrowing market as tomorrow’s deadline looms, prompting concerns about what happens to the gilt market and the pound next week," said Victoria Scholar at Interactive Investor.

"The 10-year UK gilt yield is trading close to 14-year highs, highlighting the bond market weakness, despite desperate efforts from the central bank to restore orderly markets and stem financial contagion. The pound is trading modestly lower, hovering above $1.10.”

In economic news, official data confirmed German harmonised inflation was up 10.9% year on year in September, while consumer prices in Sweden, measured with a fixed interest rate, rose 1.1% from August.

US CPI data is expected to show annual inflation hit 8.1% in September, the lowest reading in seven months and the third consecutive monthly decline.

In equity news, computer chip stocks fell after as chip-making technology supplier Applied Materials cut its profit estimates, citing US export restrictions to China.

Shares in Ladbrokes owner Entain rose after the gambling firm posted an uptick in third-quarter net gaming revenue and added that online gaming revenue for the fourth quarter was expected to rise, thanks in part to the World Cup.

Reporting by Frank Prenesti for Sharecast.com