European Stocks Muted Ahead of US Inflation Data
European stocks were muted on Monday as investors braced for the release of US inflation data later in the week. The Stoxx Europe 600 Index was little changed, with gains in the energy and materials sectors offset by losses in the consumer and financial sectors.
The Stoxx 600 closed 0.1% higher, while the UK’s FTSE 100 Index and Germany’s DAX Index both ended the day flat. The French CAC 40 Index rose 0.2%.
Inflation Worries
Investors are concerned that the US inflation data, due to be released on Wednesday, could show a sharp rise in prices. This could lead to the Federal Reserve raising interest rates sooner than expected, which could have a negative impact on stock markets.
The US dollar was also under pressure on Monday, as investors moved away from the currency in anticipation of the inflation data. The euro rose 0.3% against the dollar, while the pound was up 0.2%.
Oil Prices Rise
Oil prices rose on Monday, with Brent crude up 0.7% to $68.25 a barrel. The rise was driven by optimism that demand for oil will increase as the global economy recovers from the pandemic.
The energy sector was the biggest gainer on the Stoxx 600, with shares in Royal Dutch Shell and BP both rising more than 1%.
Tech Stocks Fall
Tech stocks were among the biggest losers on the Stoxx 600, with shares in SAP, ASML Holding and Infineon Technologies all falling more than 1%.
The tech sector has been under pressure in recent weeks as investors have become concerned about the sector’s high valuations.
Banking Sector Struggles
The banking sector was also weak on Monday, with shares in Deutsche Bank, UBS Group and Credit Suisse all falling more than 1%.
The sector has been under pressure in recent weeks as investors have become concerned about the impact of rising interest rates on banks’ profits.
Consumer Stocks Fall
Consumer stocks were also weak on Monday, with shares in Unilever, Nestle and L’Oreal all falling more than 1%.
The sector has been under pressure in recent weeks as investors have become concerned about the impact of rising inflation on consumer spending.
Outlook
European stocks are likely to remain muted in the coming days as investors await the release of the US inflation data. If the data shows a sharp rise in prices, it could lead to the Federal Reserve raising interest rates sooner than expected, which could have a negative impact on stock markets.
In the meantime, investors will be keeping an eye on the oil price, which could provide some support to the energy sector. They will also be watching the tech sector, which has been under pressure in recent weeks, and the banking sector, which has been struggling due to concerns about rising interest rates.