European shares crept higher at lunchtime on Tuesday as investors eyed US inflation later in the day, while strong China export data boosted sentiment.
The pan-European STOXX 600 was up 0.15% with most markets slightly higher. The UK’s FTSE 100 was down as February GDP figures missed estimates, despite the economy returning to growth amid Covid-19 restrictions.
British GDP grew 0.4% following a 2.2% decline in January, and versus expectations of 0.6% growth. January’s figure was revised up from a previous estimate of a 2.9% drop, according to figures released by the Office for National Statistics.
Industrial and manufacturing production both exceeded expectations, while construction output also outstripped forecasts, the ONS figures showed.
German economic sentiment cooled unexpectedly in April amid worries about the hit to activity from tighter mobility restrictions, the results of a closely-followed survey revealed.
The ZEW institute’s economic expectations index fell by 5.9 points from March to reach 70.7 for the euro area’s largest economy. Economists had pencilled-in an improvement from March’s reading of 76.6 to 79.1.
In China, data showed the country’s exports grew at a robust pace in March and import growth surged to its highest in four years.
Across the pond, analysts are expecting the standard US inflation figure to rise from 0.4% to 0.5% month-on-month, with the core reading up from 0.1% to 0.2%.
“Anything higher than those estimates will likely set alarm bells ringing; anything lower will act as reassurance about the pace of building inflationary pressures,” said Spreadex analyst Connor Campbell.
“Since the entire market has been caught up in the inflation/interest rates/bond yield fears that have intermittently taken hold this year, Tuesday’s inflation figures are almost as relevant for Europe as they are for the US. That explains why the European indices didn’t do much after the bell.”
In equity news, shares in Swedish IT solutions provider Dustin jumped 1% after the company said it would buy Benelux hardware and software seller Centralpoint, for 425m.
Air France-KLM shares fell as the company started a capital raising as part of a 4bn recapitalisation to bolster its finances from the impact of the coronavirus pandemic.
The Franco-Dutch group priced the raise at 4.84 a share and said it could raise up to 1.04bn if demand was sufficient to exercise an option to increase the size of the rights issue.
Hays shares were higher as the recruiter said full-year operating profit is set to be at least £85m, beating market expectations of around £61m, given improving fees and good underlying cost management, and assuming a continuation of current market conditions.
JD Sports Fashion stock rose as it missed annual profits expectations despite more people buying sports and casualwear during the pandemic lockdown, but reinstated dividend payments and forecast higher earnings for the current year.
Just Eat Takeaway was also in the black after it said first-quarter orders rose 79%.
