European Stocks Fall As Central Bank Signals Weigh On Sentiment

(RTTNews) - European stocks closed notably lower on Friday as the mood in the markets turned quite cautious with investors weighing the monetary policy announcements and inflation outlook from major central banks. Despite oil's continued weakness, investors were reluctant to indulge in any big buying.

A survey by the European Central Bank showed Euro Zone consumers nudged up their inflation expectations last month.

The ECB survey showed median expectations for inflation over the next twelve months increased to 3% from 2.9% in July.

Earlier in the day, the Bank of Japan raised its key interest rate by 25 basis points and warned that underlying inflation could exceed its 2% target amid rising wage and price expectations.

Investors looked ahead to next week's meeting between U.S. President Donald Trump and Gulf-state leaders on the sidelines of the United Nations General Assembly.

The pan European Stoxx 600 fell 0.95%. The UK's FTSE 100, Germany's DAX and France's CAC 40 closed lower by 1.15%, 1.18% and 1.21%, respectively. Switzerland's SMI ended down 1.15%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Finland, Greece, Ireland, Netherlands, Norway, Poland, Portugal, Spain, Sweden and Turkiye ended notably lower.

The DAX and CAC 40 shed about 1.1% and 1.4%, respectively, in the week, while the FTSE 100 was little changed.

Denmark with a modest loss, while Iceland and Russia bucked the trend and closed on firm note.

In the UK market, Airtel Africa tanked more than 11% on reports Airtel Money's owners are considering raising less money than previously sought in the company's initial public offering.

A Bloomberg report, citing people familiar with the matter, says the money transfer and payments company's IPO is now expected to raise at least $800m, down from a previously targeted size of $1.5bn to $2bn as reported by Bloomberg in April.

Sources said that Airtel Money is now considering a valuation of $8bn to $9bn to align with technology stock valuations, lower than the $10bn sought previously.

Coca-Cola HBC ended nearly 8% down. Metlen Energy & Metals, BT Group, Entain, Next, Vodafone Group, Glencore, Compass Group, Centrica, Barclays, JD Sports Fashion and Babcock International drifted lower by 3%-5.6%.

Lloyds Banking Group, Relx, Barratt Redrow, Legal & General, Marks & Spencer, Experian, ICG, Investec, Standard Chartered, The Sage Group, Kingfisher, Anglo American Plc, Prudential, British Land, Standard Life, Weir, Rolls-Royce Holdings, Associated British Foods and Informa also declined sharply.

IG Group Holdings, Fresnillo, Computacenter, AstraZeneca, DCC Energy and IMI closed with moderate gains.

In the German market, Volkswagen ended 5.6% down. Porsche Automobil Holding, Mercedes-Benz and BMW closed lower by 4.8%, 4.7% and 4.4%, respectively. Daimler Truck Holding ended 1.7% down.

Continental, Deutsche Telekom, Deutsche Bank, SAP, Commerzbank, E.ON, Bayer, Allianz, Siemens Healthineers, MTU Aero Engines, Vonovia, Heidelberg Materials, Henkel, Brenntag, BASF, Scout24, Merck and Zalando ended down 1.2%-4.5%.

Bucking the weak trend, Infineon Technologies moved higher and ended with a strong gain of about 2.7%, riding on a bullish outlook from Nvidia's CEO's prediction that says the company's chip sales would double over the coming year.

In the French market, Orange, Stellantis and Renault ended down by 5.3%-6%. ArcelorMittal, Bouygues, Hermes International, BNP Paribas, Kering, Safran, Capgemini, Edenred, LVMH, Carrefour, Credit Agricole and Societe Generale shed 2%-4%.

Vinci, Saint-Gobain, EssilorLuxottica, Sanofi, Michelin, Danone, Bureau Veritas, Unibail Rodamco and Air Liquide also ended on a weak note, while STMicroelectronics gained about 1.4%.

In economic news, data from Destatis showed Germany's producer prices advanced 4.6% year-on-year in August, marking the fifth straight month of producer price growth and accelerating from July's reading of 3.0% while surpassing market forecasts of 4.1%. It was the fastest increase in producer prices since April 2023. On monthly basis, producer prices rose 1.1% in August, the same pace as in July and still the fastest pace in three months. Prices were expected to rise 0.4% in the month.

Data from the Office for National Statistics showed UK retail sales rebounded unexpectedly in August largely driven by the recovery in non-store retailing. Retail sales grew 0.5% on a monthly basis, offsetting July's 0.5% fall. Sales were expected to drop 0.2%.

Excluding auto fuel, retail sales increased 0.6%, reversing a 0.9% fall in July. Economists had forecast a 0.2% decrease for August.

The ONS said non-store retailers partially recovered from falls in July, with lower sales volumes in July attributed to promotions occurring earlier in June. Department stores also picked up in August.

On a yearly basis, retail sales growth doubled to 2.4% from 1.2% in July. This was also stronger than forecast of 1.9%. Likewise, sales excluding auto fuel, registered an annual growth of 2.7%, following a 1.8% rise in the prior month.