Euronews Business looks at how European stock markets are opening this week amidst business climate data from Germany and upcoming UK inflation numbers
ADVERTISEMENTEuropean shares took a tumble on Monday morning, following the German ifo Business Climate falling to a three-month low of 86.4 in December. This was a step down from November’s 87.2, as well as market expectations of 87.8.
Investors are also looking ahead to the year-on-year UK inflation figures for November, due on Wednesday.
Michael Hewson, chief market analyst at CMC Markets, highlighted that "since March, UK headline inflation has slowed from 10.1% to more than half with the potential to slow even more when the latest November numbers are released later this week."
"The decline in oil and gas prices since last year is likely to continue to exert downward pressure on the headline numbers, although core CPI remains higher than perhaps the Bank of England would like at 5.7%," he added. "Looking on an even more optimistic note, headline inflation may have further to fall if PPI inflation is any guide, having fallen into deflation 5 months ago, with this week’s November CPI expected to slow to 4.3%."
Hewson said that this suggests headline inflation has the potential to slow further in the coming months and could fall towards 4% by the start of next year.
The Bank of Japan’s upcoming monetary policy decision on Tuesday is also weighing on markets somewhat, as the central bank may choose to increase interest rates in an attempt to exit its current negative interest rate policy.
Brent crude oil prices jumped 0.97% to $77.3 (€70.8) per barrel on Monday morning, whereas gold 0.18% to $2021.8 per troy ounce.
Energy and steel stocks advance, luxury goods dull
On Monday morning, the CAC 40 index dropped 0.34% to €7,569, while the Stoxx 600 index dipped 0.12% to €476. The FTSE 100 index, however, inched up 0.6% to £7,622.
Amongst the top performing stocks on the CAC 40 index was steelmaker ArcelorMittal, surging almost 4% to €25.9, following the company's Bosnian staff and management agreeing to bring their current strike to an end.
TotalEnergies was also one of the top gainers, jumping 1.61% to €62.6, as the company made new strides in expanding its Suriname operations.
Luxury stocks did not start the week on a very upbeat note, with Hermès being down 2.40% to €1,989.6, following global consumer demand still being cautious, especially as Christmas draws closer. Kering also slumped 1.6% to €410.7.
What to watch in the week ahead
Apart from the UK inflation report and the Bank of Japan interest rate decision, investors are looking forward to the year-on-year euro area inflation report for November. This is expected to come in at 2.4%, down from 2.9% in October.
The German GfK Consumer Confidence report for January is also due on Wednesday and is estimated to come in at -27.8, a step down from December’s -27.
UK retail sales and French business climate numbers are also due later this week.
