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European Stocks Edge Higher; LVMH Helps Luxury Sector Impress

Stock MarketsApr 14, 2021 03:36AM ET
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By Peter Nurse - European stock markets edged higher Wednesday, with the luxury sector impressing as the first-quarter earnings season begins.

At 3:40 AM ET (0840 GMT), the DAX in Germany traded 0.1% higher, the CAC 40 in France rose 0.3% and the U.K.’s FTSE 100 gained 0.1%.

The move was also supported by falling bond yields in the U.S., where inflation concerns eased after March's CPI data overshot expectations by an insignificant amount. 

The U.S. consumer price index rose 0.6% in March, the biggest increase since August 2012, but the market had seemingly positioned for a strong figure as rising vaccinations and fiscal stimulus released pent-up demand. 

This CPI number is unlikely to change Federal Reserve Chair Jerome Powell's view that higher inflation in coming months will be transitory. The benchmark 10-year U.S. Treasury yield dropped as low as 1.61%, partly as a result of that, and partly because of other news that put a dampener on economic reopening trades.

Johnson & Johnson (NYSE:JNJ) has delayed the rollout of its Covid-19 vaccine outside the U.S. after the U.S. federal health agencies recommended pausing the use of the drug due to blood clotting worries.

This is the second vaccine, after AstraZeneca’s, to have such issues, and may further delay the EU's vaccination program, which may in turn delay a return to economic normality. Germany, which has still vaccinated less than 25% of its population, extended its lockdown by another three weeks on Monday.

In the corporate sector, LVMH (PA:LVMH) stock climbed 2.8% to a record high after the world's biggest luxury goods company posted a strong start to 2021 as Chinese and U.S. shoppers returned in droves. Christian Dior (PA:DIOR) stock rose 3.1% after reporting an 8% rise in sales, which also helped rivals Kering (PA:PRTP) and Hermes (PA:HRMS) higher. 

SAP (DE:SAPG) stock rose 3.4% after the German software giant raised its 2021 revenue outlook, while plastics company Covestro (DE:1COV) stock rose 2.4% after the plastics company lifted its profit outlook.

On the flip side, Tesco (OTC:TSCDY) stock fell 3.2% after the U.K. supermarket chain reported a 20% drop in full-year pretax profit, while Credit Suisse (SIX:CSGN) stock fell 1.9% as the banking giant continued to unwind positions related to last month's meltdown of Archegos Capital.

Oil prices pushed higher Wednesday after industry data showed U.S. oil inventories declined more than expected last week, a sign of growing demand in the largest oil consumer in the world.

Crude stocks fell by 3.6 million barrels in the week ended April 9, according to data from the American Petroleum Institute, compared with forecasts for a decline of about 2.2 million barrels prepared by

Official inventory figures from the U.S. Energy Information Administration are due later Wednesday.

U.S. crude futures traded 1.4% higher at $61.05 a barrel, while the Brent contract rose 1.3% to $64.48. 

Elsewhere, gold futures fell 0.1% to $1,745.20/oz, while EUR/USD traded 0.1% higher at 1.1960.


European Stocks Edge Higher; LVMH Helps Luxury Sector Impress

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