Lower edge of European equities; Inflation in the United States, focus on the UK retail sector By Investing.com


© Reuters.

By Peter Nurse

Investing.com – European stock markets weakened on Thursday as investors digest the latest searing US inflation statement as festive trade statements put the spotlight on the UK retail sector.

At 4:00 a.m.ET (09:00 GMT), Germany was trading down 0.2%, France was down 0.6%, and the UK’s was down 0.2%.

Global markets are still studying the December US release, which posted the largest annual increase since 1982. The release cemented expectations of repeated interest rate hikes over the next 12 months, and followed the Federal Reserve Chairman Jerome Powell’s pledge to curb inflation without derailing the economic recovery in his renown testimony on Capitol Hill earlier this week.

Back in Europe, a number of ECB policymakers are expected to speak later Thursday, but this central bank is not seen as close to raising interest rates due to varying market conditions. the work of the euro zone and the greater fragility of the recoveries in countries such as Italy.

In business news, the UK retail sector is the center of attention on Thursday after a number of major players issued trade statements that marked the important holiday season.

Marks & Spencer (OTC 🙂 stock fell 5% despite the UK retailer raising its earnings outlook after reporting a strong Christmas performance. The group is recovering after a decade of decline, and its stock has nearly doubled in the past year.

Tesco (OTC 🙂 stock fell 2.1%, but remained close to its highest level since 2014, despite the UK’s largest supermarket raising its profit forecast for the year whole, claiming its highest market share in four years.

On the flip side, ASOS (LON 🙂 stock rose 6.4% after the online fashion retailer was able to reiterate its outlook – admittedly already lowered – despite supply chain issues that affected sales growth in the four months leading up to the end of its year.

Elsewhere, shares of Volkswagen (DE 🙂 fell 1.7% after the German auto giant was forced to close two factories in the Chinese city of Tianjin due to recent outbreaks of Covid-19 there. Toyota has already suspended production at its Tianjin plant.

The coronavirus continues to affect life in Europe. Germany on Wednesday reported more than 80,000 cases of the coronavirus, a new daily record, prompting Chancellor Olaf Scholz to suggest mandatory injections for all adults. Greece is set to extend some restrictions, Denmark will offer a fourth vaccine to vulnerable citizens, while UK Prime Minister Boris Johnson struggles to maintain his position after admitting to breaking his own restrictions, saying he did not realized that a gathering of over 40 people with drinks and snacks in his garden was a party (the invitation sent to over 100 people by his private secretary had invited guests to bring their booze).

Oil prices have stabilized after mixed data from the US Energy Information Administration. Wednesday’s post showed a much larger-than-expected 4.5million barrel drawdown last week, with inventories at their lowest since October 2018. However, they were up 8million barrels, suggesting that the fuel demand was affected by Omicron.

As of 4 a.m. ET, futures contracts edged up to $ 82.67 a barrel, while the contract rose 0.1% to $ 84.76. Both contracts jumped more than 1% in the previous session.

Additionally, it fell 0.4% to $ 1,819.40 / oz, while it traded 0.2% higher to 1.1465, a two-month high.

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