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European stocks edge lower as heavyweight miners decline

Stock MarketsMay 13, 2021 12:26PM ET
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© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, April 28, 2021. REUTERS/Staff

By Sruthi Shankar and Shreyashi Sanyal

(Reuters) - European stocks dipped on Thursday, weighed down by a fall in heavyweight miners after commodity prices tumbled, while a rapid rise in U.S. inflation kept risk sentiment at bay.

The pan-European STOXX 600 index edged down 0.1%, after falling as much as 1.7% earlier in the session, drifting further away from an all-time high.

Basic resources fell 3.0%, leading declines among European sectors, while oil and gas slipped 1.4%. The sectors were among recent market leaders on the back of a surge in commodity prices. [MET/L] [O/R]

Automakers also shed 0.9%, while defensive names like utilities, healthcare and telecoms rose.

U.S. inflation readings for April pointed to a steady rise, fanning concerns that the Federal Reserve would raise interest rates earlier than expected. However, Wall Street reclaimed lost ground as technology stocks rebounded after open. (N)

"At one point today European markets were down heavily... inflation concerns once again weighed on sentiment, however these lows proved to be short-lived, with the rest of the day spent clawing the bulk, or all of the losses back," said Michael Hewson, chief market analyst at CMC Markets in London.

"In an extremely fickle environment markets are continuing to wrestle with the dilemma as to whether the current bout of rising inflation prints is transitory in nature"

European stocks have rallied to all-time highs this month, with the STOXX 600 up almost 9.5% so far this year as economic recovery prospects and strong earnings drew buyers of equities.

British luxury brand Burberry tumbled 4.2% on reporting a 10% drop in annual sales, weighed down by the COVID-19 pandemic.

UK's biggest broadband and mobile provider, BT Group (LON:BT), fell 5.9% as it reported a 7% decline in revenue and a 6% drop in adjusted earnings for the full year.

In another disappointing London stock market debut, shares of Canadian chip company Alphawave plunged by as much as 21%.

British engineering company Rolls-Royce (OTC:RYCEY) fell nearly 6%, as it stuck to its guidance to turn free cash flow positive at some point during the second half of 2021.

Markets in Denmark, Finland, Norway, Sweden and Switzerland were closed for public holiday.

European stocks edge lower as heavyweight miners decline
 

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Comments (7)
Amine Fourali
Amine Fourali May 13, 2021 5:40AM ET
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Time to raise rates
Ursa Minor
Ursa Minor May 13, 2021 5:38AM ET
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deflation fears, inflation fears, covid fears, rate hike fears, rate cut fears, debt fear, money printing fears, china fears, tax hike fears, how many phobias does this market have?
Investing Man
Investing Man May 13, 2021 5:38AM ET
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Depends on how many excuses they can conjur up to take profit that they can make people believe lol
Christophe Soulet
Christophe Soulet May 13, 2021 5:38AM ET
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The endless wall of worries, as usual…
Chew Khiong
Chew Khiong May 13, 2021 5:38AM ET
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Imagine when those stocks drop to a certain level, they will publish articles & mention that the inflation is actually under control. Then they will push up the share price again. The cycle is keep repeating.
Gary Smith
Gary Smith May 13, 2021 5:03AM ET
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I think the sell off is a major over-reaction. I'm not worried at all. I only regret not having more cash ready to load up on more stocks.
Amine Fourali
Amine Fourali May 13, 2021 5:03AM ET
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When you have markets at ATH you dare to make this statement. Rates need to be raised...
Lake Lot
Lake Lot May 13, 2021 5:03AM ET
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Lower rates ,
Gary Smith
Gary Smith May 13, 2021 5:03AM ET
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Amine Fourali  Markets are at ATH because some people are overbought into some stocks, which are ridiculously over-priced. There is still a lot of value out there. Value holders shouldn't worry too much. But if you are holding hot-potatoe stocks....that's totally different.
Francesco Lucchesi
Francesco Lucchesi May 13, 2021 5:03AM ET
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Gary Smith you will be punished so hard you will never forget it
Ciro Lazio
Ciro Lazio May 13, 2021 4:51AM ET
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In this case its markets are selling the rumour.. overreaction
Jouni Matero
Jouni Matero May 13, 2021 4:51AM ET
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Well markets have been buying the rumour for weeks so about time it goes the other way round too.
simone scelsa
simone scelsa May 13, 2021 4:32AM ET
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The writing was on the wall, inflation is always a monetary policy issue  (money printers went brrrrr), not a sing of healthy economies. The reopening after the pandemic has nothing to do with this.
SquadW Name
SquadW May 13, 2021 4:24AM ET
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Inflation worries = commodity/value stocks going up
Steffen vdm
Steffen vdm May 13, 2021 4:04AM ET
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What a joke this is. Pumping stocks for more than a year with the excuse that markets look beyond lockdowns and this is priced in, meanwhile ignoring all the bad signs and warnings. And now that economies are opening up, suddenly inflation becomes an issue. Big traders are making money over small investors backs (including myself). Scalper Trader summarized it very well
 
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