Skip Header
Important information: The value of investments can go down as well as up so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. This is a third-party news feed and may not reflect Fidelity’s views.

Europe midday: Losses extend as spirits stocks hit by China probe

(Sharecast News) - European shares extended losses on Friday as inflation rose in the eurozone, albeit less than expected, and Germany posted weak retail sales numbers, while spirits manufacturers were hit by an anti-dumping probe by China.

The pan-regional Stoxx 600 index was down 0.92% at 473.29 with all major bourses lower.

Eurozone inflation accelerated in December, according to Eurostat, but by less than expected, reinforcing expectations that the European Central Bank will soon move to cut interest rates.

The annual change in the harmonised index of consumer prices rose to 2.9% last month, a significant increase from 2.4% in November but below the consensus estimate for a stronger increase to 3.0%.

This jump was largely a result of a big drop in energy prices in Germany in December 2022 due to one-off subsidies by the government which is expected to be only temporary as core inflation continued its downward trend.

Headline inflation readouts for France and Germany for December were both slightly higher on the previous month.

German retail sales dropped sharply in November as non-food sales tanked, according to the federal statistics office, Destatis.

Retail sales were down 2.5% during the month, wiping out the 1.1% gain registered in October, and surprising analysts who had pencilled in a decline of just 0.1%.

Compared with November 2022, the annual rate of decline worsened to 2.4% after a 0.1% fall the month before and well below the 0.5% decrease expected by the market.

"Markets have stalled in the first week of trading this year, unable to carry through last month's momentum in the face of renewed concerns around the amount, pace and timing of potential Federal Reserve interest rate cuts," said Richard Hunter, head of markets at Interactive Investor.

"The minutes from the latest Fed meeting earlier in the week appeared to dash any hopes of an imminent cut. While there was an admission that rates had peaked, the previous mantra of higher for longer seemed to remain firmly intact, dependent on economic data and inflation in particular."

"Despite this reiteration, market consensus is still pencilling in the first cut in March, although with rather less conviction than before, with the most likely timing now moving out to May."

In equity news, Endeavour Mining shares slumped after chief executive Sebastien de Montessus was fired with immediate effect for serious misconduct related to an ­irregular payment of $6m and amid allegations over his personal ­conduct toward colleagues.

Shares in French spirits companies Remy Cointreau and Pernod Ricard both registered sharp falls fell after China announced the launch of an anti-dumping investigation on brandy imported from the European Union.

Online pharmacy DocMorris surged by more than 10% after an upgrade by Berenberg to ;buy' from 'hold'.

Reporting by Frank Prenesti for Sharecast.com

Share this article

Related Sharecast Articles

London midday: Oil and mining stocks drag UK markets lower
(Sharecast News) - Losses in the mining and oil sectors were providing a drag on London's FTSE 100 on Monday, as investors scaled back their appetite for risk in light of rising geopolitical tensions in the Middle East.
US pre-open: Futures higher following last week's sell-off
(Sharecast News) - Wall Street futures were in the green ahead of the bell on Monday as market participants strapped in for the beginning of corporate earnings season.
London open: Israel-Iran tensions weigh on stocks early on
(Sharecast News) - Iran's attack on Israel overnight was weighing on London's stock market on Monday morning, with the FTSE 100 dropping 0.4% to 7,960 early on.
Asia report: Most markets fall on fresh geopolitical concerns
(Sharecast News) - Asia-Pacific markets were mixed but mostly lower on Monday, against a backdrop of escalating geopolitical tensions and ahead of key economic indicators.

Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

Award-winning online share dealing

Search, compare and select from thousands of shares.

Expert insights into investing your money

Our team of experts explore the world of share dealing.