European shares muted as higher oil prices offset bond market recovery

European shares were flat on Thursday as concerns over higher oil prices and inflation partially offset support from a recovery in global bonds after a U.S. Treasury intervention.

The pan-European STOXX 600 .STOXX held its ground at 651.44 points, as of 0708 GMT.

U.S. President Donald Trump warned of economic consequences against any country that provided "any type of lifeline to Iran" as Washington seeks to resolve the conflict with Tehran, which it entered alongside Israel nearly six months ago.

Brent crude LCOc1 climbed roughly 0.6% to around $92 a barrel. Travel and leisure stocks .SXTP were down 0.4%, as higher oil prices raised concerns over fuel costs. O/R

Basic resources .SXPP fell 0.7%, the biggest sectoral decline, as gold prices retreated on profit-taking after a rally fuelled by lower bond yields and a weaker dollar. GOL/

The U.S. Treasury moved to support the bond market by increasing purchases of long-dated debt after yields climbed to multi-year highs.

Global bond markets came under pressure this week as investors fretted about increasing government debt, while higher oil prices compounded concerns.

Germany's DAX .GDAXI underperformed regional peers. The country's borrowing costs climbed to a 15-year high as the country faces increased defence spending needs, mirroring a broader rise in bond yields across major economies.

-Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by Sherry Jacob-Phillips/Reuters