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European stock markets traded slightly lower on Thursday, as investors evaluated economic data and retail sector earnings.
- At 03:05 ET (08:05 GMT), Germany’s DAX slipped 0.2%, France’s CAC 40 fell 0.2%, and the UK’s FTSE 100 remained flat.
- Trading volumes are expected to be muted, with U.S. markets closed to honor former President Jimmy Carter, ahead of his state funeral.
Economic Data in Focus
Germany’s Industrial Production
- Industrial production in Germany rose by 1.5% in November, surpassing expectations of a 0.5% increase.
- This positive news follows less encouraging data, including a 5.4% drop in industrial orders and a 0.6% decline in retail sales for November.
Eurozone Inflation and ECB Policy
- Eurozone inflation edged up to 2.4% in December from 2.2% in November, remaining above the European Central Bank’s (ECB) 2% target.
- ECB policymaker François Villeroy stated on Wednesday that further interest rate cuts are anticipated in 2025, potentially reaching a neutral rate of around 2% if inflation is contained by the summer.
Retail Sector Earnings
Tesco
- Tesco shares dropped over 3%, despite reporting robust holiday performance, with UK like-for-like sales growth of 4.1% in the six weeks ending January 4.
- Investors were disappointed as Tesco maintained its operating profit guidance for 2024/25, following an earlier upgrade during its half-year results.
Marks & Spencer
- Marks & Spencer shares tumbled 7% after acknowledging economic challenges, despite a strong Christmas period with like-for-like sales growth of 6.4% in the 13 weeks to December 28.
Corporate Developments
BP’s Production Expansion in India
- BP announced plans to increase oil production by 44% and gas output by 89% from India’s largest offshore field under a decade-long agreement.
- The project is operated in collaboration with India’s Oil and Natural Gas Corp.
Market Outlook
European investors remain cautious as they weigh strong industrial data from Germany against ongoing inflation pressures in the Eurozone and mixed retail earnings. Further insights into monetary policy, inflation trends, and corporate performance will likely shape market sentiment in the coming weeks.
