European Stocks Largely Higher; French Data Helps Ahead of ECB
European stock markets edged largely higher Wednesday, helped by strong French economic data while investors digest a number of corporate releases.
At 4 AM ET (0900 GMT), the DAX in Germany traded 0.3% higher, the CAC 40 in France rose 0.5%, while the U.K.’s FTSE index dropped 0.1%, with mining stocks suffering from further weakness in base metals prices after the announcement of new anti-pollution policies in China.
French industrial production rose 3.3% on the month in January, a hefty jump from December’s fall of 0.7%. This will be music to the ears of the members of the European Central Bank, ahead of its monetary policy meeting on Thursday, particularly after Eurozone quarterly GDP was revised lower in the fourth quarter on Tuesday under the influence of lockdowns.
Although there are hopes that these lockdowns will be eased soon, the region will in all likelihood register a technical recession when the first quarter’s GDP figures are released. This may put pressure on the ECB to increase its bond purchases, not least to head off the effects of a global rise in long-term interest rates..
In corporate news, Adidas (OTC:ADDYY) stock rose 3% after the German sportswear maker predicted a strong rebound in sales in 2021, particularly in China, although its operating profit will be trimmed by costs associated with divesting the Reebok brand.
Just Eat Takeaway (AS:TKWY) stock rose 2.4% after the food delivery company said it expected further growth in 2021, noting that orders were up 88% in the key U.K. market in the first two months of the year.
On the flip side, Inditex (MC:ITX) stock fell 1.7% after the Spanish fashion group, and owner of Zara, reported a 70% fall in 2020 net profit as the Covid-inspired global lockdowns kept many of its shops shut.
Geberit (SIX:GEBN) stock fell 1.5% after the Swiss company declined to give an outlook for 2021, citing uncertainties surrounding the pandemic. It still posted its highest ever free cash flow and proposed hiking its dividend.
Elsewhere, the U.S. House of Representatives is likely to pass the $1.9 trillion Covid relief bill later Wednesday, allowing President Joe Biden to sign it into law by the weekend.
Oil prices were largely unchanged Wednesday, as traders wait for the official U.S. crude stocks from the Energy Information Administration are expected later Wednesday. Crude inventories rose by 12.8 million barrels in the week to March 5, according to data from the American Petroleum Institute.