European Stocks Close Lower On Interest Rate Concerns

(RTTNews) - European stocks closed notably lower on Thursday on concerns the Federal Reserve will likely hold interest rates higher for longer after data from the Labor Department showed an acceleration in U.S. consumer price growth in the month of December.

The Labor Department said its consumer price index climbed by 0.3% in December after inching up by 0.1% in November. Economists had expected consumer prices to rise by 0.2%. Excluding food and energy prices, core consumer prices still rose by 0.3% in December, matching the increase seen in November as well as economist estimates.

The report also showed the annual rate of consumer price growth accelerated to 3.4% in December from 3.1% in November. The annual rate of growth was expected to tick up to 3.2%.

Meanwhile, the annual rate of growth by core consumer prices slowed to 3.9 percent in December from 4.0 percent in November. Economists had expected the pace of core price growth to decelerate to 3.8 percent.

A number of economists have said the data makes the U.S. central bank less likely to cut interest rates in March, with many predicting the central bank will hold off until its May meeting.

The pan European Stoxx 600 ended down 0.77%. The U.K.'s FTSE 100 dropped 0.98%, Germany's DAX ended down 0.86%, and France's CAC 40 slid 0.52%, while Switzerland's SMI closed lower by 0.9%.

Among other markets in Europe, Austria, Belgium, Denmark, Finland, Norway, Poland, Portugal, Spain and Sweden ended weak.

Greece, Russia and Turkiye closed higher, while Iceland and Netherlands ended flat.

In the UK market, Barclays ended nearly 5% down. WPP, Rolls-Royce Holdings, Lloyds Banking, Ocado Group, Taylor Wimpey and Associated British Foods lost 3 to 4%.

Marks & Spencer ended more than 3% down. The British retailer reported strong holiday sales growth but warned of an uncertain outlook for this year.

Informa ended notaby lower despite reporting a robust performance in a trading update for 2023.

Barratt Developments, Endeavour Mining, HSBC Holdings, M&G, Vodafone, Standard Chartered and Croda International also declined sharply.

Whitbread climbed about 2.3%, and Rentokil Initial gained 1.5%. BAE Systems, Anglo American Plc, and Diageo also closed notably higher.

In the German market, Deutsche Bank lost about 4.8%. RWE, Bayer, Zalando, Daimler Truck Holding, Fresenius, Vonovia, Covestro, Siemens Energy, Infineon, BMW and Commerzbank lost 1 to 3.2%.

In Paris, Societe Generale declined nearly 4%. Kering and BNP Paribas both ended lower by about 3%. ArcelorMittal, Credit Agricole, Saint Gobain, LVMH, Publicis Groupe, Micheline, Engie, Renault and AXA lost 1 to 2%.

Teleperformance rallied 4%. Pernod Ricard, Capgemini, Alstom, Dassault Systemes and Air Liquide gained 0.75 to 1.5%.