Anisha Sicar and Ambar Warrenrick

(Reuters] European stocks ended flat Monday due to gains in commodity-linked banks and sectors that were boosted by rising bond yields. Also, the outlook for the telecom industry was deteriorating.

With 472.21 points closing unchanged, the pan-European was mostly stable. Sentiment also fluctuated due to concerns regarding rising inflation rates and slowing economic development.

Energy stocks and mining rose by 1.8% and 1.0% respectively. This was due to oil prices reaching multi-year highs, and prices rebounding as a result of a fall in Chinese inventories. [O/R] [MET/L]

Since the beginning of the week, the market was concerned about the threat of stagflation. The market becomes more concerned about stagflation when oil prices go up,” Andrea Cicione (head of strategy, TS Lombard) said.

The expectation of tightening monetary policy in Britain and the U.S. has led to rising bond yields. Bank stocks benefited from this, as they rose 0.8% to an almost two-year-high. [GVD/EUR]

HSBC Holdings, NYSE:), gained 1.9% due to concerns over pandemic related bad loans. The surprise 74% jump in profit for the British bank and the $2 billion buyback announced by them also redirected fears about that.

However, rising yields have weighed down on utilities and industrials as they reduced future dividend-linked returns.

Airbus, the planemaker, fell 1.6% after it rejected calls for tempering plans to almost double its A320 family of jets.

Telecom stock fell 0.9% following BofA Global Research’s reinstatement of “underperform” ratings for Nokia (NYSE) and Ericsson(BS:), based on low earnings expectations and indications that the 5G market has peaked.

Last week’s six-week record high for the STOXX 600 was fueled by optimism regarding earnings season. Now, the focus is on important earnings reports as well as an EU Central Bank meeting.

Sixty-three percent of STOXX 600 businesses that published third-quarter reports in the first quarter have exceeded analyst profit estimates according to Refinitiv II/B/E/S. A typical quarter saw 52% beating estimates by about 52%.

UniCredit fell 1.7% following the end of talks between the Italian government (MPS) and the bank over the sale Tuscan bank Monte dei Paschi di Siena, which was in serious financial trouble.

Monte dei Paschi di Siena (MPS) slid 2.4%.

Spain’s Sabadell rose 2.8% when it announced that its board had turned down an offer by Co-operative Bank to acquire its British subsidiary TSB.