European shares react to trade disruptions and await key U.S. inflation data

At the start of trading on Friday, European stocks took a hit, primarily due to a decline in the shares of technology and sportswear companies. Investors are carefully weighing the potential impact of global trade disruptions following attacks in the Red Sea. Additionally, they await the release of crucial inflation data in the United States, which could influence expectations of lower interest rates next year.

The European STOXX 600 index slipped by 0.2%, heading towards its weakest weekly performance in six weeks. Netherlands-based Prosus shares saw a significant drop of 14.5%, placing pressure on the technology sector, resulting in a 1.2% decline.

The personal and household goods sector also faced a downturn, with Adidas and Puma shares falling by 6.1% and 4.4%, respectively, after Nike, their American counterpart, adjusted down its annual sales expectations.

Before the Christmas holiday, the spotlight will be on the release of the Personal Consumer Price Index in the United States, a key measure of inflation for the Federal Reserve. This data is scheduled to be unveiled later on Friday.

Amid concerns about disruptions in the Red Sea, following attacks by the Houthi movement from Yemen on ships, shipping companies, including Germany’s Hapag-Lloyd, announced their plans to avoid the region. These incidents have disturbed global trade, leading to the establishment of a maritime task force. Hapag-Lloyd shares, however, rose by 1%.