🔥 Premium AI-powered Stock Picks from InvestingPro Now up to 50% OffCLAIM SALE

European stocks mixed; weak U.K. economy dilutes positive sentiment

Published 07/13/2023, 02:20 AM
Updated 07/13/2023, 03:39 AM
© Reuters.

Investing.com - European stock markets traded in a mixed fashion Thursday as investors digested the softer-than-expected U.S. inflation data as well as weak U.K. growth data.

At 03:25 ET (07:25 GMT), the DAX index in Germany traded 0.1% lower, the FTSE 100 in the U.K. traded down 0.1%, while the CAC 40 in France rose 0.1%.

The main European stock indices posted healthy gains Wednesday after soft U.S. consumer inflation data raised hopes that July’s expected interest rate increase by the Federal Reserve could be the last in this tightening cycle.   

U.K. economy contracted in May

However, that optimism has been punctured, to a degree, Thursday after data showed that the U.K. economy contracted by 0.1% in May, hit by the impact of strikes and an extra bank holiday to mark the coronation of King Charles.

While this drop was less than the 0.3% expected, and should mean that the economy avoids a decline for the second quarter as a whole, the Bank of England is expected to continue tightening monetary policy with inflation at the highest level in the G7. This could make a recession in the second half of the year difficult to avoid.

Chinese trade data disappoints 

Also weighing on sentiment was the news out of China earlier Thursday, as data showed that the Asian giant’s exports shrank 12.4% on an annual basis in June, at their worst pace since March 2020, the height of the COVID-19 pandemic. 

Imports also fell 6.8% in June, falling at their fastest pace since March this year, and a much deeper contraction than the 4.5% seen in May. 

These numbers show how badly China’s reopened economy is stuttering, to the detriment of many of Europe’s major exporting companies.

Barry Callebaut reports a drop in sales

Barry Callebaut (SIX:BARN) stock fell 1.7%  after the world's biggest chocolate maker reported lower nine-month sales volumes than a year ago as customer demand dropped in an inflationary environment.

Oil edges higher; Chinese crude imports jumped in June

Oil prices rose slightly Thursday, hovering near three-month highs on the back of the softer-than-expected U.S. inflation data and strong Chinese monthly oil imports.

China's crude imports in June rose over 45% on the year, hitting its second-highest monthly figure on record, customs data released on Thursday showed, raising hopes of a recovery at the world’s second-largest economy and biggest crude importer. 

However, gains have been limited by an unexpected build in U.S. oil inventories, with the Energy Information Administration indicating that stocks grew 5.95 million barrels in the week to July 7, much more than forecast.

By 03:25 ET, the U.S. crude futures traded 0.2% higher at $75.90 a barrel, while the Brent contract climbed 0.3% to $80.34. 

Additionally, gold futures rose 0.2% to $1,965.10/oz, while EUR/USD traded 0.1% higher at 1.1141.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.