European stocks were mixed by midday on Tuesday as investors eyed the release of US inflation data later in the day.
The benchmark Stoxx Europe 600 index was flat at 467.70, Germany’s DAX was 0.1% higher at 15,720.18 and France’s CAC 40 was down 0.4% at 6,652.60.
Oanda market analyst Craig Erlam said: “Stocks are treading water early on Tuesday as we await key US inflation data ahead of the open on Wall Street.
“This isn’t the most exciting week as far as major event risk is concerned but the proximity to the Fed meeting next week combined with a few select US data releases is creating some tension in the markets. We may see a lot more of this fence-sitting behaviour over the next week as traders await more taper clues from the central bank.
“Policymakers have appeared keen to stress that a taper this year remains their preference but there has increasingly been a disconnect between what they’re saying and what the data is doing. If we continue to see softness in the data, will the FOMC still persevere with tapering this year or could they be persuaded to hold off?
“That’s the question investors are craving an answer to. For now, they’ll have to settle for more data to see if it piles on the pressure or provides a release. Today it’s CPI inflation and its significance has only grown in the absence of Fed speak, with the blackout period now being upon us. An overshoot could cause a wobble in the markets as it will give greater cause for debate on the nature of the inflation data, transitory or something more worrying. The opposite could keep investors on board for now.”
The US inflation data for August is due at 1330 BST.
In equity markets, miners were under pressure as copper prices fell, with the Stoxx Europe 600 basic resources index down 0.9% at 586.26.
Luxury stocks weighed particularly heavily on the French index, with Kering, LVMH and Richemont all in the red amid concerns about rising Covid cases in China, which is a big consumer of luxury brands.
Elsewhere, Danish brewer Carlsberg was knocked lower by a double downgrade to ‘sell’ at Berenberg, while British Airways and Iberia parent IAG flew lower after a downgrade to ‘neutral’ from ‘outperform’ at BNP Paribas.
On the upside, jewellery company Pandora rallied after saying it aims to achieve sales growth of 6% to 8% in the coming years.
