European stocks set for weakest monthly return in a year, as dollar steamrolls over the euro

Elsewhere, the German DAX DAX, -0.68% fell 0.5%, the French CAC 40 PX1, -0.62% fell 0.6% and the FTSE 100 index UKX, -0.31% was down 0.3%. The euro EURUSD, -0.01%, meanwhile, was modestly lower against the dollar at $1.1588, but is trading at the lowest level in more than a year as expectations for tighter policy from the Federal Reserve has left the dollar 1% higher this week.

Another day of soaring natural gas and electricity prices in Europe was a focus for investors.

October Title Transfer Facility (TTF) natural gas futures in the Netherlands— the European benchmark — climbed nearly 7% to 93.20 euros per megawatt hour (MWh) , while U.K. natural gas futures rose 7% to 242.28 pence a therm. German and French power futures prices also reportedly reached record highs. The French government will be meeting Thursday to figure out how to alleviate elevated power prices for consumers.

Also on Thursday, the U.K., which has been suffering petrol or gasoline shortages, saw three more smaller energy providers go out of business, leaving over 200,000 customers to find a new provider as wholesale natural gas prices have soared in the country.

Europe finds itself struggling with power and natural gas shortages as Friday marks the official start of winter. Utilities were under pressure on Thursday, with shares of Iberdrola IBE, -2.80% tumbling 2.7%, National Grid NG, -1.53% down 1.5% and Vestas Wind Systems VWS, -3.30% dropping over 3%.

Gainers on Thursday included Diageo DEO, +0.99% DGE, +1.25%, up 1.2% after an upbeat trading update.

Mining-related stocks such as BHP Group BHP, +1.42% BHP, +1.71% and Rio Tinto RIO, +1.93% RIO, +1.64% rose 0.7% and 1.6%. Data from China showed economic activity for the manufacturing sector contracted in September, the first pullback since early 2020.