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European Stocks Mixed; Thyssenkrupp Impresses With Update

Stock MarketsNov 18, 2021 03:35AM ET
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By Peter Nurse - European stock markets traded mixed early on Thursday as investors digested the region’s growing inflationary pressures as well as positive updates from Thyssenkrupp (DE:TKAG), National Grid (LON:NG) and Royal Mail (LON:RMG).  

At 3:35 AM ET (0835 GMT), the DAX in Germany traded 0.2% higher, the CAC 40 in France rose 0.2%, but the U.K.’s FTSE 100 dropped 0.2%.

Thyssenkrupp stock rose 3.8% after the German engineering and steel group predicted its operating profit could more than double next year as its recovery continues. The conglomerate also indicated it is considering listing its hydrogen unit in an initial public offering. Elsewhere in Germany, Daimler AG (DE:DAIGn) stock rose 2.1% and BMW (DE:BMWG) stock rose 1.4% as investors priced in expectations that the 30% year-on-year drop in European car sales in October will be the bottom of the cycle. 

Additionally, Royal Mail stock climbed 6.9% after the postal group said it would return 400 million pounds ($539.84 million) to shareholders following a strong first half in which more people shopped online, boosting its parcel delivery business.

National Grid (LON:NG) stock rose 0.7% after the power transmission service lifted its outlook for the year, benefiting from an early commissioning of the North Sea Link electricity interconnector between Britain and Norway.

The major equity indices in Europe have pushed to record levels, with the DAX and the CAC 40 posting all-time highs Thursday, boosted by strong corporate earnings, but concerns are growing about the region’s inflationary outlook and the impact this could have on monetary policy.

Eurozone inflation surged 4.1% year-on-year in October, data revealed Wednesday, more than twice the European Central Bank's target. At the same time, the equivalent U.K. number came in at 4.2%, its highest in almost a decade.

The ECB has repeatedly said that these price pressures should ease next year, but is coming under increased pressure to abandon its ultra easy monetary policy and tackle price growth.

Its own Financial Stability Review warned on Wednesday that increasingly stretched prices in property and financial markets, risk-taking by non-banks and elevated borrowing pose a threat to the region’s stability.

Over in the U.K., the Bank of England is widely expected to become the first of the G7 central banks to raise interest rates in the wake of the pandemic, probably in December.

The day’s major economic data release comes from the U.S., with the weekly initial jobless claims numbers set to provide another look at the state of the country’s labor market. 

Crude prices fell overnight, continuing the sharp losses of the previous session, following a Reuters report that the U.S. is trying to arrange a coordinated release of strategic reserves by a number of major crude consumers in order to bring prices down.

China's state reserve bureau confirmed Thursday that it was working on a release of crude oil reserves. 

By 3:35 AM ET, U.S. crude futures traded 0.9% lower at $76.89 a barrel, after dropping 3% during the last session, while the Brent contract fell 0.6% to $79.81, after falling 1.7% on Wednesday. Both benchmarks recorded their lowest settlement levels since early October. 

Additionally, gold futures fell 0.1% to $1,867.65/oz, while EUR/USD traded 0.1% higher at 1.1330.


European Stocks Mixed; Thyssenkrupp Impresses With Update

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Empire Destroyer
Empire Destroyer Nov 18, 2021 5:49AM ET
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Dax at ATH, more corona news on Germany pls, send Dax to next ATH
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