Investing.com – European stocks pulled back on Wednesday with most indices slightly lower, as investors digested a deluge of economic data.
Just after midday in Europe, the benchmark Euro Stoxx 50 lost 0.19%, France’s CAC 40 dropped 0.20%, and Germany’s DAX 30 traded down 0.39%.
On the economic calendar, attention focused on the strong reading for the euro zone economy has the services purchasing managers’ index (PMI) unexpectedly increased to 53.7 in December. That meant the composite reading for the region, including both manufacturing and service sector activity, increased to its fastest expansion since May 2011.
Also released on Wednesday, headline inflation in the euro zone increased by an annualized 1.1%, beating expectations for a 1.0% gain. Upward price pressure was mostly felt from the energy sector, though the core reading did unexpectedly advance to a 0.9% gain.
While the uptrend in inflation will be good news for the European Central Bank (ECB) as it prepares for its next policy meeting on January 19, the reading remains far below its 2% objective.
The major economic report in the U.K. also showed good news as construction activity was boosted by new order growth at an 11-month high. However, prices remained under upward pressure due to the pound’s weakness on the back of Britain’s decision to leave the European Union, known as Brexit. Input cost inflation hit its highest level since April 2011.
Countering the positive economic report, shares in Next PLC (LON:NXT) plunged 10% as the British retailer launched a profit-warning for 2017 on its expectations that there will be a slowdown in spending as inflation hits real incomes. Next expects the weakness in sterling following the Brexit vote to push up prices.
Meanwhile, oil prices rebounded on Wednesday from sharp losses of 3% produced on the back of a Genscape report that Cushing crude inventories, the key entry point for Nymex crude, had produced a build of more one million barrels.
Industry group the American Petroleum Institute is due to release its weekly report at 4:30PM ET (21:30GMT) later on Wednesday. Official data from the Energy Information Administration will be released Thursday, amid forecasts for an oil-stock drop of 1.7 million barrels.
This week's reports come out one day later than usual due to Monday's New Year holiday.
Energy stocks were trading mostly lower, as French oil and gas major Total SA (PA:TOTF) fell 0.47% , Italy’s ENI (MI:ENI) was unchanged, while Norwegian rival Statoil (OL:STL) lost 1.41%.
Financial stocks returned gains, as French lenders BNP Paribas (PA:BNPP) and Societe Generale (PA:SOGN) gained 1.47% and 0.50%, while Germany’s Deutsche Bank (DE:DBKGn) and Commerzbank (DE:CBKG) traded up 1.83% and 0.36%, respectively.
Among peripheral lenders, Italy’s Intesa Sanpaolo (MI:ISP) was up 2.00%, though Unicredit (MI:CRDI) edged forward only 0.07%, while Spanish banks showed mixed trade with BBVA (MC:BBVA) down 0.44% and Banco Santander (MC:SAN) traded up 0.84%.
In London, the commodity-heavy FTSE 100 slipped 0.06%, pulling back from the prior day’s record high and losses in mining stocks.
Shares in Glencore (LON:GLEN) fell 1.33% and Anglo American (LON:AAL) lost 1.12%, while BHP Billiton (LON:BLT) and Rio Tinto (LON:RIO) traded down 1.13% and 1.12% respectively.
Energy stocks were mixed, as BP (LON:BP) lost 0.25% but rival Royal Dutch Shell (LON:RDSa) gained 0.52%.
Financial stocks were mixed. Shares in HSBC Holdings (LON:HSBA) inched up 0.01% and the Royal Bank of Scotland (LON:RBS) rose 0.52%, while Barclays (LON:BARC) gained 0.46% and Lloyds Banking (LON:LLOY) fell 0.20%.
In the U.S., equity markets pointed to a slightly higher open. The Dow Jones Industrial Average futures gained 0.09%, S&P 500 futures rose 0.10%, while the Nasdaq 100 futures advanced 0.09%.