European shares flat as inflation woes offset earnings cheer, China recovery hopes

This comes amid falling COVID-19 cases in China fuelling hopes that curbs could be lifted, which could prompt more economic activity and demand from the world's second-largest economy. Germany's Commerzbank AG rose 1% after a report that it had scheduled merger talks with Italy's UniCredit SpA , before the potential deal was shelved due to the Ukraine war.


Reuters | Updated: 18-05-2022 13:04 IST | Created: 18-05-2022 13:02 IST
European shares flat as inflation woes offset earnings cheer, China recovery hopes
Representative Image. Image Credit: Pixabay

European shares were flat in early trade on Wednesday, as some strong earnings and hopes about China's economic recovery were offset by worries about inflation and monetary policy tightening.

Utilities led gains, up 1.4%. But falling copper prices weighed on basic material stocks, which pushed London's commodity-heavy FTSE 100 index into the red. Data showed British consumer price inflation hit 9.0% in April, its highest level on record, inching closer to the Bank of England's (BoE) forecast for it to top 10% later this year.

Investors expect the BoE will add to the four interest rate increases it has done since December, which took its Bank Rate to 1%. This comes amid falling COVID-19 cases in China fuelling hopes that curbs could be lifted, which could prompt more economic activity and demand from the world's second-largest economy.

Germany's Commerzbank AG rose 1% after a report that it had scheduled merger talks with Italy's UniCredit SpA before the potential deal was shelved due to the Ukraine war. Reuters had reported in 2019 that the Italian bank had explored potential options for Commerzbank. Euronext surged 5.7% after it reported record quarterly revenue, as the pan-European stock exchange profited from high market volatility during a time of international crises.

 

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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