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Europe stocks subdued after recent gains

written by Bella Palmer

The DAX index in Germany was 0.4 per cent up, while the CAC 40 in France was 0.2 per cent down and the FTSE 100 in the U.K. dropped 0.1 per cent

European stock markets traded in a subdued fashion Thursday, consolidating after recent gains on hopes that the policy tightening cycles of a number of major central banks are over.

At 08:55 GMT, the DAX index in Germany was 0.4 per cent up, while the CAC 40 in France was 0.2 per cent down and the FTSE 100 in the U.K. dropped 0.1 per cent.

The main European equity indices have pushed higher this week, bolstered by economic data showing cooling U.S. inflation, with Wednesday’s release suggesting producer prices dropping at their fastest pace since April 2020. This has supported views that U.S. interest rates have peaked.

Similarly, in Europe, U.K. consumer inflation undershot all forecasts, and the focus will soon shift to the eurozone's latest inflation figures on Friday, after it dropped to 2.9 per cent in October, its lowest for more than two years.

Economic data releases are thin on the ground in Europe Thursday, but a number of central bankers, including ECB President Christine Lagarde, are scheduled to speak at various events. Investors will be looking for further clues that more interest rate hikes are becoming increasingly unlikely.

Also helping the tone this week was Chinese industrial and retail data beating expectations in October, raising hopes for a recovery in the second biggest economy in the world.

Nevertheless, data released Thursday showed that China's new home prices dropped for the fourth consecutive month, indicating the crisis-hit property sector will continue to forestall a full-blown revival.

In the corporate sector, Siemens stock gained 5.7 per cent after the German industrial conglomerate reported Q4 industrial profit ahead of expectation, even as it provided a more cautious sales outlook for 2024.

Aegon stock added 3.7 per cent after the Dutch insurer raised its annual capital generation forecast after topping Q3 expectations, driven by a strong performance in the key U.S. market.

On the flip side, Burberry stock plunged 8.8 per cent after the British luxury group said it would struggle to meet its annual revenue forecast of low double-digit growth, as it was being hit by a global slowdown in luxury spending.

HelloFresh stock slid over 20 per cent after the German meal-kit maker cut its annual core profit outlook and lowered its revenue growth guidance.

In the U.S., retailers Walmart, Bath & Body Works and Macy's report earnings.

Oil prices pulled back Thursday after U.S. inventories increased more than expected, adding to concerns over lacklustre energy demand from China.

By 8:55 GMT, the U.S. crude futures were 0.3 per cent down at $75.41 a barrel, while the Brent contract declined 0.5 per cent to $80.79 a barrel.

Data released late Wednesday by the U.S. Energy Information Administration showed that U.S. crude stocks increased 3.6 million barrels in the week to November 10, more than expectations for a build of around 1.8 million barrels.

Data also showed that U.S. production remained at record highs of 13.2 million barrels per day through the week.

In Asia, China's oil refinery throughput eased in October from the previous month's highs as industrial fuel demand weakened and refining margins narrowed.

Additionally, gold futures increased 0.3 per cent to $1,969.75/oz, while EUR/USD was 0.1 per cent up at 1.0853.


The opinions expressed by our writers are their own and do not represent the views of UK Investment Guides. The information provided on UK Investment Guides is intended for informational purposes only. UK Investment Guides is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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