European stocks mostly higher; UK retail sector in focus
European stock markets mostly rose Tuesday, rebounding after recent losses, but inflation concerns and rising borrowing costs are set to keep investors cautious.
At 03:05 ET (08:05 GMT), the DAX index in Germany climbed 0.6% and the CAC 40 in France gained 1%, while the FTSE 100 in the UK dropped 0.1%. Chinese gains help overall tone
European equities have largely bounced from the prior session’s weakness, helped by a positive tone seen in Asia overnight on reports of a gradual US tariff increase under the new Donald Trump administration.
Chinese stocks surged Tuesday following a Bloomberg report indicating that members of President-elect Donald Trump’s incoming economic team are considering a plan to gradually increase tariffs each month.
The proposal is in the preliminary stages and has not yet been presented to Trump, indicating that the concept is still under early consideration.
Trump has vowed to impose a minimum 60% tariff on Chinese exports, and has also signaled that European auto manufacturers could face additional costs importing into the US. French PM set to speak
That said, investors will continue to keep an eye on government bond yields in the eurozone, the UK and the US, after yields on short and long-dated government debt climbed to fresh multi-month highs last week, raising the costs of governments servicing their debt.
New French Prime Minister Francois Bayrou is scheduled to speak later in the session, appealing for support from some opposition parties - and the Socialists in particular - in order to pass the 2025 budget.
French government debt yields have soared this year as investors worry about political instability and a burgeoning public deficit, and investors are worried Bayrou will row back on pension reforms that could save billions of euros for the government.
Also of note will be the release of US producer prices , ahead of the more widely-watched consumer price index on Wednesday, as investors fret that elevated inflation levels will limit interest rate cuts by the Federal Reserve in 2025.
The European Central Bank , by contrast, is widely expected to cut interest rates at least four times this year, having cut four times last year. Ocado soars, JD Sports slumps
In corporate news, Swiss chocolate maker Lindt & Spruengli (SIX:LISN ) said its sales grew 7.8% organically last year, a little below market expectations, hampered by record high cocoa prices and weakened consumer sentiment.
Ocado (LON:OCDO ) stock soared 12% after the British online supermarket said its sales growth accelerated in its fourth quarter, as more competitive pricing helped it win more customers from rivals, while JD Sports Fashion (LON:JD ) stock slumped 12% after the retailer cut its full year profit guidance after revenue fell during the all-important Christmas quarter.
Persimmon (LON:PSN ) stock gained over 4% after the housebuilder reported growth in sales last year, pointing to the beginnings of recovery in the housing market. Crude retreats from four-month highs
Oil prices slipped lower Tuesday, retreating from the four-month highs that were triggered by new US sanctions on Russian oil exports and worries over supply disruptions.
By 03:05 ET, the US crude futures (WTI) dropped 0.5% to $75.91 a barrel, while the Brent contract fell 0.7% to $80.45 a barrel.
Oil has gained strongly over the prior two sessions after the Biden administration introduced its most comprehensive sanctions package to date, aimed at cutting into Russia's oil and gas revenues.
These developments are expected to significantly disrupt Russian oil exports, compelling major importers like China and India to seek alternative suppliers in regions such as the Middle East, Africa, and the Americas.
Source: Investing.com
