European stocks mixed; Barclays reports slump in profit

By Peter Nurse 

Investing.com - European stock markets traded in a mixed fashion Wednesday, with investors digesting inflation data from both the U.S. and the U.K., while banking giant Barclays reported a sharp slide in annual profit.

At 03:20 ET (08:20 GMT), the DAX index in Germany traded 0.2% higher, the CAC 40 in France climbed 0.2%, while the FTSE 100 in the U.K. fell 0.3%.

Data released earlier Wednesday showed that British consumer price inflation fell by more than expected to 10.1% in January from December's 10.5%, providing some hope that the surge in prices, which had severely hit the living standards of the country’s households, had turned a corner.

The Bank of England is still widely expected to announce another increase in borrowing costs next month, but these numbers have raised expectations that a peak in the central bank’s benchmark interest rate is not far off.

The news across the pond on Tuesday was less optimistic, as inflation remained resilient in January despite a series of interest rate hikes by the Federal Reserve, suggesting more increases are likely in the near-term.

Back in Europe, investors will focus on a speech by European Central Bank head Christine Lagarde later in the session, while there are industrial production figures for the Eurozone in December to study.

In the corporate sector, Barclays (LON:BARC) stock slumped over 7% after the British bank reported a hefty 14% fall in annual profits, hit by litigation charges for the year of £1.6 billion (£1 = $1.2085) from overstepping agreed limits on sales of investment products in the United States.

Glencore (LON:GLEN) was also in the spotlight after the trading and mining company announced a hefty payout of $7.1B to its investors, including a new $1.5B share buyback program, while posting a record 2022 trading profit thanks to strong oil and coal prices.

Oil prices retreated sharply Wednesday after a surge in the U.S. crude inventories raised concerns over the prospect of weaker fuel demand in the U.S., the largest consumer of crude in the world.

Data from the American Petroleum Institute indicated that U.S. crude inventories rose by around 10.5 million barrels last week, a considerably larger build than the 1.2 million-barrel rise widely expected.

Additionally, gasoline stocks rose by about 846,000 barrels, while distillate stocks rose by about 1.7 million barrels.

Official government inventory estimates from the Energy Information Administration are due later in the session.

By 03:20 ET, U.S. crude futures fell 1.3% to $78.05 a barrel, while the Brent contract dropped 1.2% to $84.57. 

Additionally, gold futures fell 1.2% to $1,842.60/oz, while EUR/USD traded 0.2% lower at 1.0711.