European stocks mixed; earnings flood in ahead of Eurozone CPI release

By Peter Nurse 

Investing.com - European stock markets traded in a mixed fashion Thursday, with investors digesting more corporate earnings and the latest Federal Reserve minutes ahead of key Eurozone inflation data. 

At 03:55 ET (08:55 GMT), the DAX index in Germany traded 0.5% higher, the CAC 40 in France climbed 0.3%, while the FTSE 100 in the U.K. fell 0.3%.

The main European indexes have had a tricky week to date–the DAX, the CAC 40 and the FTSE 100 are all around 1% lower–on concerns that interest rates will have to continue to rise to combat inflation, stifling economic activity.

The final read of Eurozone’s January CPI is due later in the session, and is expected to see an upward revision to 8.6% on the year, from the previous month's 8.5%. And that was before the unexpected pick-up in business activity this month.

Christine Lagarde, the president of the European Central Bank, reaffirmed last week the central bank’s intention to raise borrowing costs by another half-point next month, and further hikes into the early summer look very likely.

The minutes of the Federal Reserve's latest meeting, released late Wednesday, showed some policymakers wanted to slow the pace of interest rate hikes so they could read the incoming economic data.

But that was before the barnstorming January jobs report largely ended talk of an imminent recession. 

The earnings season continued apace in Europe.

Deutsche Telekom (ETR:DTEGn) stock rose 1% after the German telecommunications giant reported fourth-quarter earnings coming in slightly ahead of expectations, helped by customer growth in Germany and strong performance from T-Mobile US (NASDAQ:TMUS). 

Accor (EPA:ACCP) stock rose 2% after Europe’s biggest hotel group beat expectations for its annual core profit, citing "very good" activity in December.

WPP (LON:WPP) stock rose 5.3% after the advertising giant hiked its dividend and offered upbeat guidance for 2023 after reporting a healthy rise in full-year profit.

Rolls-Royce (LON:RR) stock soared 18% after the engineering company easily beat profit expectations, while the new CEO Tufan Erginbilgic forecast “much more” to come.

AXA (EPA:AXAF) stock rose 3.2% after the French insurer, Europe’s second biggest, raised its targets for 2023 and announced a share buy-back program of up to €1.1 billion (€1 = $1.0610) this year.

Oil prices edged higher Thursday, finding some support after a lengthy losing streak on increasing concerns higher interest rates will limit economic activity and thus fuel demand.

Additionally, data from the American Petroleum Institute showed U.S. oil stocks rose almost 10 million barrels last week, prompting investor worries about demand at the world’s largest consumer. Inventories have now climbed every week since mid-December.

By 03:55 ET, U.S. crude futures traded 0.4% higher at $74.25 a barrel, after dropping for six consecutive days, while the Brent contract rose 0.5% to $80.97. 

Additionally, gold futures fell 0.4% to $1,834.05/oz, while EUR/USD traded 0.1% higher at 1.0604.