UPDATE 2-European shares mark third straight quarterly decline amid recession fears

Reuters

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      STOXX 600 falls for third straight quarter
    

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      Euro zone inflation hits record high
    

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      Puma, Adidas fall after rival Nike warns on gross margin
    

  
 (Updates to market close)
    By Devik Jain and Amruta Khandekar
       Sept 30 (Reuters) - European shares climbed on Friday
but saw sharp losses during a quarter marked by rising interest
rates and tumbling risk sentiment, with hot inflation data from
the region keeping investors on edge.
    The region-wide STOXX 600 index  .STOXX  closed up 1.3% but
had briefly pared some session gains after data showed euro zone
inflation zoomed past forecasts to 10.0% in September, hitting a
new record high. 
    The inflation numbers fuelled expectations of another
super-sized interest rate hike from the European Central Bank. 
    All of the STOXX sectors ended the day in positive
territory, with bargain hunting driving gains among beaten-down
retailers  .SXRP , oil and gas  .SXEP  and bank  .SX7P  stocks.
    "It's only a small consolidation but it's a step in the
right direction. It's hard to know to know if we have reached
the absolute low," said Michael Baker, head of online services
at Oval Money.
    "Till inflation comes under control, you'll see a kind of
unease (in markets)."
    The STOXX 600 index has fallen 4.8% during the
July-September period marking its third straight quarterly
decline in what will be its longest such losing streak since
2011.
    Markets have been roiled since the Russia-Ukraine war
earlier this year jolted the region and sent gas prices soaring,
leading to rampant inflation, which sparked aggressive rate
hikes from central banks and worries about a subsequent growth
slowdown.
    A string of recent inflation numbers have exacerbated
concerns about the pace and extent of monetary policy tightening
globally.
    Data on Friday showed U.S. consumer spending rebounded in
August after falling in July, stoking fears of more hawkish
policy moves from the U.S. Federal Reserve.
    Meanwhile, inflation in the Netherlands touched its highest
in decades on skyrocketing energy prices, adding to concerns
around grim inflation numbers from Germany reported on Thursday.
    London's blue-chip FTSE 100  .FTSE  briefly dipped before
closing up 0.2% while the domestically-focused mid-caps index
 .FTMC  jumped 2.3% as the pound gained ground after the Bank of
England's intervention in bond markets.
   A Reuters poll found the BoE was unlikely to raise rates
before its next scheduled policy meeting in November despite a
recent hit to sterling from its controversial economic growth
plans announced last week.
    On the geopolitical front, President Vladimir Putin
proclaimed Russia's annexation of a swath of Ukraine, even as
Russian forces face setbacks on the battlefield. The Russian
president's proclamation of Russian rule over 15% of Ukraine has
been firmly rejected by Western countries and even many of
Russia's close allies.
    Shares of German sportswear makers Puma  PUMG.DE  and Adidas
 ADSGn.DE  slid 5.7% and 4.1% respectively, after U.S. rival
Nike Inc  NKE.N  cautioned about pressure on margins.
 urn:newsml:reuters.com:*:nL4N3103WB urn:newsml:reuters.com:*:nL8N3111UW
 (Reporting by Devik Jain, Amruta Khandekar and Susan Mathew in
Bengaluru; Editing by Savio D'Souza and Rashmi Aich)
 ((Devik.Jain@thomsonreuters.com;))

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