European opened Wednesday’s session slightly lower as China inflation data and a rising number of UK Covid cases kept a lid on sentiment.
The pan-European Stoxx 600 index was down 0.03% as investors also kept an eye on a European Central Bank policy decision and US inflation data later this week.
China’s producer price index (PPI) for May jumped 9% from a year earlier, against expectations of an 8.5% increase. The country’s consumer price index in May rose 1.3% from a year earlier, lower than an expected 1.6% rise.
“While some of the (PPI) rise can be attributed to base effects due to the huge slide in commodity prices that we saw in March and April last year which saw PPI decline -3.7%, there is increasing evidence that various supply side issues are starting to create a situation where rather than being transitory, inflation pressures could become more persistent,” said CMC Markets analyst Michael Hewson.
“It is certainly something Chinese business is becoming more concerned about, along with Chinese authorities given recent steps to curb the recent sharp rise in commodity prices.”
In equity news, shares in travel food outlet operator SSP Group rose 1.8% after the company reported wider interim losses due to the pandemic, but said trading in the UK and North America had improved since the end of March as vaccine rollouts accelerated.
Airlines were also higher after the US CDC said it was easing travel recommendations on 110 countries and territories. Air France KLM, Lufthansa and British Airways-owner IAG all posted gains, as did Aeroports de Paris and Fraport.
Spanish retail giant Inditex rose 1.3% after reporting a forecast-busting first-quarter net profit of 421m.
French food group Danone slipped 1.5% after RBC downgraded the stock to ‘under perform’.
