European shares end 3-day losing streak as defensives pull higher

European shares end 3-day losing streak as defensives pull higher

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* Miners lead declines, down 1.8%

* Richemont to sell YNAP stake to Farfetch; shares rise

* Bavarian Nordic vows to boost monkeypox vaccine supply

By Anisha Sircar and Shreyashi Sanyal

Aug 24 (Reuters) - European shares eked out gains by the close on Wednesday, buoyed by a rise in defensive stocks, though worries over a looming energy crisis and gloomy growth outlook kept gains in check.

The pan-European STOXX 600 .STOXX ended 0.2% higher, breaking a three-day losing streak but hovering near one-month lows.

Defensive sectors including healthcare .SXDP led gains, while miners .SXPP fell 1.8%, the most across European sectors.

Markets assessed risks from rising interest rates, bleak economic data, high inflation and a potential recession.

"The continued surge in European gas prices, and likelihood that they will remain extremely high, means that the euro zone will probably suffer a deeper recession than we had previously anticipated," said Jack Allen-Reynolds, senior Europe economist at Capital Economics.

Additionally, European benchmark gas prices TRNLTTFMc1 have tripled in a little over two months as a winter of unreliable energy supplies from Russia looms.

"There was a strong global equity rally earlier led by the U.S. that dragged up Europe with it, but the European outlook is still very difficult," said Graham Secker, Morgan Stanley's chief European equity strategist.

"As we go into Jackson Hole, the market is beginning to reassess that rally, thinking the Fed is still going to stay hawkish, so we're seeing some profit taking."

Investors were cautious ahead of the Jackson Hole symposium in Wyoming after Minneapolis Federal Reserve Bank President Neel Kashkari on Tuesday reiterated the Fed's focus on controlling inflation ahead of all else.

"European inflation expectations are still rising while growth expectations are deteriorating, so the fundamentals continue to get more challenging for equities," Secker said.

German 10-year government bond yields DE10YT=RR rose to a fresh 8-week high as inflation fears reinforced expectations for an aggressive monetary tightening path.

Market focus was also on minutes from the European Central Bank's last policy meeting due on Thursday that are likely to sound hawkish.

Among stocks, Richemont CFR.S rose 3.6% after the company said Farfetch FTCH.N would acquire a 47.5% stake in the luxury goods group's loss-making online fashion retailer YOOX Net-A-Porter and that Alabbar would take 3.2%.

Bavarian Nordic BAVA.CO added 4.6% after the Danish biotech firm said it was making "every effort" to meet the high demand for its monkeypox vaccine around the world as it retained its business outlook for the year.
Reporting by Anisha Sircar and Shreyashi Sanyal in Bengaluru; Editing by Anil D'Silva and Bernadette Baum