European Stocks Close Lower On Weak Data, Hawkish Comments From Bank Officials

(RTTNews) - European stocks closed weak on Tuesday as hopes about an early interest rate cut by central banks faded a bit following some hawkish comments from a few top officials.

Data showing an acceleration in Germany's consumer price inflation weighed as well.

French central bank Governor Francois Villeroy de Galhau said in Davos that it's too early to declare victory over inflation, but the ECB's next move is likely to be an interest rate cut sometime this year.

Separately, Robert Holzmann, Austria's central bank governor, said investors should not "bank" on the ECB cutting rates at all this year.

In economic releases, data showed German consumer price inflation accelerated somewhat amid a rebound in energy costs, as initially estimated in December.

The consumer price index registered an annual increase of 3.7% in December, following a 3.2% rise in November, Destatis said. That was in line with the flash data published on January 4.

Elsewhere, official data showed that that the U.K. average earnings grew less-than-expected for three months ending November.

Data from the Office for National Statistics showed that the U.K. average earnings including bonuses increased 6.5% in three months to November, which was weaker than economists' forecast of 6.8%. Excluding bonuses, earnings grew 6.6%, matching expectations.

UK's jobless rate came in at 4.2% in three months to November, the same rate as seen in three months to October.

The pan European Stoxx 600 ended down 0.24%. The U.K.'s FTSE 100 drifted down 0.48%, Germany's DAX dropped 0.3% and France's CAC 40 settled lower by 0.18%, while Switzerland's SMI gained 0.2%.

Among other markets in Europe, Austria, Belgium, Finland, Greece, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden and Turkiye closed weak.

Denmark and Iceland bucked the trend and closed higher.

In the UK market, JD Sports Fashion ended more than 5% down. RightMove drifted lower by about 4.4%.

Fresnillo, Standard Chartered, AstraZeneca, Convatec Group, Barclays, Informa, Endeavour Mining, Frasers Group, Lloyds Banking, Segro, Airtel Africa, BT, Natwest Group and Angla American Plc ended lower by 1.3 to 3%.

Experian rallied 2.5%. Ocado Group gained nearly 2% after saying it would return to positive earnings for the 2022/23 year.

Hikma Pharmaceutical, Compass Group and Burberry Group gained 1.4 to 2%. Next, Relx and Flutter Entertainment also ended notably higher.

In the German market, Commerzbank, Puma, Zalando, Siemens Energy and Adidas lost 2.3 to 4.1%. Fresenius, Continental, Vonovia, Sartorius, Daimler Truck Holding, Covestro and RWE declined 1 to 2%.

Hugo Boss shares plunged more than 10% after the company's fourth-quarter EBIT fell short of expectations.

Qiagen climbed about 2.7%. Merck ended with a gain of 1.1%.

In Paris, Alstom, Teleperformance and Engie lost 2.2 to 3.3%. Legrand, Stellantis, Saint Gobain, Michelin and Renault also ended notably lower.

Air France-KLM Group shares ended 2.5% down. The airline announced today its decision to withdraw from its existing air cargo agreements with CMA CGM, a French shipping and logistics company, from March 31, 2024.

Dassault Systemes surged more than 2.5%. Publicis Groupe gained about 1.3%, while Sanofi and Edenred gained 1% and 0.8%, respectively.