European Shares Slide Amid Bond Yield Surge and Nestle Shake-Up

European stocks dropped to a three-week low due to climbing bond yields. Nestle shares fell following CEO Laurent Freixe's removal over undisclosed relationships. Luxury stocks gained, while long-dated bonds saw selling pressure. Unexpectedly high eurozone inflation raised questions about European Central Bank's rate policies.

European shares plummeted to a three-week low on Tuesday as escalating bond yields shook investor confidence. The STOXX 600 index fell by 0.6% due to significant declines in rate-sensitive sectors like real estate and utilities.

Nestle shares contributed to the downturn, dropping 1% after the Swiss company's CEO, Laurent Freixe, was ousted for not disclosing a romantic relationship. This sudden leadership change raises concerns about potential volatility for the food giant as it grapples with challenging consumer environments and trade issues.

Meanwhile, in the luxury market, stocks saw an uptick following brokerage upgrades. Kering and LVMH experienced significant gains after HSBC lifted their stock ratings. Additionally, the eurozone reported a surprising 2.1% inflation rise in August, casting uncertainty on the European Central Bank's interest rate strategies.

(With inputs from agencies.)