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Europe midday: Shares slide into red as investors eye US CPI

(Sharecast News) - European markets slid into the red on Tuesday as investors awaited key US inflation data later in the day and digested UK wage growth figures. The pan-European Stoxx 600 index was down 0.49% at 485.09 in early deals after a strong session in the US overnight.

"US markets continue to push on the ceiling, driven by a confluence of positive factors which have lifted investor sentiment," said Interactive Investor head of markets Richard Hunter.

"The Nasdaq briefly passed its record closing high during the session before slipping back, the benchmark S&P500 remains near to the record set last week, while the Dow Jones rose to a new high yesterday."

"A largely positive earnings season has underpinned gains, erasing any concerns that the market may have overestimated the number and scale of interest rate cuts from the Federal Reserve this year."

US consumer price index data is expected to show a fall in the January headline figure to 2.9%, down from 3.4% the previous month. Core inflation - which strips out volatile food and energy prices - is expected to fall to 3.7% from 3.9%.

In Germany economic sentiment strengthened this month, a closely-watched survey showed on Tuesday, despite the country's economy continuing to struggle.

The latest ZEW indicator of economic sentiment improved 4.7 points in February to 19.9, the seventh consecutive month of increases.

This was despite the indicator of the current economic situation shedding 4.4 points to -81.7, the lowest since June 2020, at the start of the pandemic.

Meanwhile UK regular pay growth slowed to an annual 6.2% in the three months to December, according to data from the Office for National Statistics, while unemployment held steady at 3.8%.

Analysts had forecast wages excluding bonuses to grow at a slightly lower 6% year-on-year.

In equity news, German travel giant Tui surged after posting a quarterly operating profit of €6m on the back of upbeat travel demand, smashing estimates of €102m loss.

Reporting by Frank Prenesti for Sharecast.com

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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.

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