European shares slipped lower at midday but were still in record territory on Thursday as investors continued to digest inflationary data and another daily deluge of corporate news.
The pan-European Stoxx 600 was down 0.08% with regional bourses mixed. Germany’s DAX and France’s CAC 40 both hit record highs in the morning session.
Investors have taken a back seat after data released on Wednesday showed euro zone inflation at 4.1% year-on-year in October, more than double the European Central Bank’s target.
The ECB also warned of stretched valuations in property and financial markets, as the region recovers from the Covid pandemic against a backdrop of ultra-low interest rates and massive stimulus measures.
In London, pressure is on the Bank of England to lift borrowing costs after the consumer price index came in at 4.2% in October – its highest in almost a decade as energy and automotive costs soared.
The BoE raised eyebrows earlier this month after balking at a rate rise, despite indicating that one was imminent.
Oil stocks suffered after crude prices plunged on worries of a supply overhang and China thinking about a possible release of strategic fuel reserves.
“Crude oil has suffered sharp losses over the past 24 hours, with (US President Joe) Biden’s calls for a release of strategic reserves overshadowing the decline in US stockpiles announced yesterday,” said said IG analyst Joshua Mahony.
“A simultaneous release of stocks from both the US and China certainly brings some short-term relief given today’s declines, but there remains plenty of questions over whether the lack of new investment will ultimately lead to a long-standing supply deficit that pushes up energy prices for years to come.”
Thyssenkrupp shares climbed after the German conglomerate beat profit expectations and lifted its 2022 outlook.
Daimler shares were up as Berenberg initiated coverage a a ‘buy’ recommendation’ citing earnings potential from the recently spun-off truck division.
Housebuilders were on the rise after Crest Nicholson lifted its full-year profit expectations. Persimmon, Bellway, Taylor Wimpey, Barratt and Berkeley were all higher on a read-across.
UK manufacturing engineer Rotork slumped as it warned of supply chain pressures on revenues due to computer chip shortages.
Shares in Polish parcel locker operator InPost slumped again after Wednesday’s disappointing earnings outlook, and despite announcing a new deal on Thursday allowing eBay sellers access to its 2,500 parcel lockers.
