European Stocks Flat as Investors Await Key Economic Data and French Elections

European markets opened cautiously on Thursday, with the pan-European STOXX 600 index holding steady. Investors are refraining from significant moves ahead of critical U.S. inflation (PCE) data due on Friday, which could influence the Federal Reserve’s interest rate decisions. Consumer price data from France, Spain, and Italy this week, as well as the first round of the French parliamentary elections over the weekend, are also contributing to market uncertainty.

Retail Sector Takes a Hit

The retail sector experienced a notable decline, led by a 12.5% drop in H&M shares after the fashion retailer missed quarterly profit expectations and projected a decrease in June sales.

Mixed Performance in Other Sectors

Basic resources also experienced a slight dip, with Anglo American slipping 1.6% following a downgrade by Berenberg to “sell.” However, the real estate sector saw some gains, with Unibail-Rodamco-Westfield rising 1% after receiving rating upgrades from multiple brokerages.

Positive News from Serco

British outsourcing company Serco Group provided a bright spot, surging 4.5% after raising its annual profit forecast.

Key Events to Watch

Investors are eagerly awaiting the release of U.S. inflation data (PCE) on Friday, which will provide crucial insights into the Federal Reserve’s monetary policy outlook. Additionally, consumer price data from France, Spain, and Italy this week will be closely monitored for signs of inflationary pressures in the Eurozone.

The first round of French parliamentary elections over the weekend will also be on investors’ radar, as the outcome could have implications for government policies and economic reforms.