Rising Inflation Leaves European Markets Directionless
European stock markets closed mixed on Friday (July 31) as investors scrutinized rising Eurozone inflation and a raft of corporate earnings reports. The Stoxx 600 index dipped 0.1%, Germany's DAX rose 0.1%, the UK's FTSE 100 fell 0.3%, France's CAC 40 gained 0.3%, and the Swiss Market Index dropped 0.3%.
Market pressure mounted after Eurozone consumer inflation rose to 2.9% year-on-year in July, up from 2.8% in June. This increase could prompt the European Central Bank to remain cautious regarding the direction of interest rates, as price pressures remain above target.
On the regulatory front, Temu's parent company, PDD, and its subsidiary WhaleCo Technology face preliminary allegations from the European Commission regarding the obstruction of an inspection process. Authorities believe the companies failed to provide requested information and documents during an investigation into potential foreign subsidies that could distort competition within the European Union.
Tensions also surfaced in the football world following reports that UEFA has approved a potential boycott of FIFA tournaments. This move could be taken if FIFA President Gianni Infantino proceeds with plans to sell a stake in a new commercial entity to investors; UEFA maintains that the World Cup should not be treated as an investment product.
In the corporate sector, Novo Nordisk shares plunged more than 7% after its drug ziltivekimab failed to reduce the risk of death from heart disease, heart attack, or stroke in late-stage clinical trials. Conversely, Shell shares rose 1.9% after selling its Cyprus operations to MOL Group, while BP gained 1.8% after initiating the sale of its North Sea oil and gas assets.
NatWest shares surged 3.2% after its profit and revenue beat market expectations. HSBC fell 0.7% after forecasting restructuring costs of US$300 million related to the closure of its retail banking business in Australia.
Newsmaker Analysis: Rising inflation could limit the scope for easing monetary policy in Europe, while near-term stock market movements are likely to be driven more by corporate earnings reports and corporate actions. (arl)
Source: Newsmaker.id
