European shares ease ahead of U.S. jobs data; euro zone inflation surges
European shares slipped on Friday as investors awaited a key U.S. jobs report for clues on how fast the Federal Reserve will tighten its monetary policy, while data showed euro zone inflation surged to a record high in December. The pan-European STOXX 600 edged 0.3% lower.
European shares slipped on Friday as investors awaited a key U.S. jobs report for clues on how fast the Federal Reserve will tighten its monetary policy, while data showed euro zone inflation surged to a record high in December.
The pan-European STOXX 600 edged 0.3% lower. Travel and leisure stocks led losses with a 1.6% fall, declining for a second straight session, as several major European countries grapple with an Omicron-led surge in coronavirus cases. After hawkish signals from the Federal Reserve sent equity markets into a tailspin this week, all eyes are the U.S. non-farm payrolls report due later in the day.
Investors entered the new year with optimism but were soon faced with the reality that measures put in place to help economies deal with the pandemic are set to ease, said AJ Bell financial analyst Danni Hewson. "The easy money made last year on growth stocks is going to get squeezed."
Euro zone inflation rose unexpectedly last month, data on Friday showed, likely making for more uncomfortable reading at the European Central Bank, which has consistently underestimated price pressures and come under fire for this from some of its own policymakers. The STOXX 600 began the new year at a record high but is struggling to hold weekly gains, dragged mostly by tech shares as investors rotate out of high-growth stocks in expectation of a high rate environment.
But tech stocks outperformed on Friday, rising 0.7% on a boost from Franco-Italian chipmaker STMicroelectronics , which topped the benchmark index with a 5.5% jump after posting quarterly revenue above its own estimates. German chipmaker Infineon Technologies gained 3.0%, taking cues from South Korea's Samsung Electronics that posted upbeat fourth-quarter results.
Deutsche Bank climbed 0.4% to a more than six-month high. The German lender's finance chief told Handelsblatt in an interview that the firm is confident it will reach a key profitability target this year. On the downside, Airbus dropped 0.8% after reports that Qatar Airways is seeking more than $600 million in compensation from the planemaker over surface flaws on A350 jetliners. Polish parcel locker firm InPost dropped 6.9% to the bottom of the STOXX 600 after posting weaker-than-expected quarterly parcel volume growth in the country.
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