Europe open: Markets subdued after US inflation, China data

(Sharecast News) - European stock markets opened mostly lower on Friday morning, with the STOXX Europe 600 index taking a pause after its recent rally, following a poor showing on Wall Street and yet more disappointing economic data from China. The pan-European equity benchmark was down 0.15% early on, with small gains in London and Madrid offset by weakness in Frankfurt, Paris and Milan. The STOXX Europe 600 index has risen for five of the past six sessions, gaining nearly 3%.

US stocks fell on Thursday after a stronger-than-expected consumer price index reading, raising concerns that interest rates will have. to stay higher for even longer as the Federal Reserve struggles to bring down stubborn inflation.

"While the figures were close to estimates, they nonetheless reignited concerns that the last leg towards reaching the Fed's 2% target could prove the most difficult, with some core measures apparently refusing to budge," said Richard Hunter, head of markets at Interactive Investor. "The news also came after a stronger than expected reading on producer prices the previous day, adding to the fact that investors currently have more questions than answers."

Meanwhile, Friday morning's inflation and trade data for China failed to impress," which once again showed that the Chinese economy continues to struggle", said analyst Michael Hewson from CMC Markets.

Chinese imports dropped by 6.2% year-on-year in September, better than the 7.3% decline seen in August but slightly worse than the -6% consensus forecast. Meanwhile, export declines slowed to -0.6%, from -3.2%. Meanwhile, the annual rate of consumer inflation fell from 0.1% to 0% in September, while core inflation was steady at 0.8%.

"With the woes in its property sector far from resolved, and youth unemployment well above 20% there appears to be little sign that will see an economic pickup any time soon. Not only has domestic demand been weak, but global demand for Chinese goods has slowed sharply since April with declines in exports every month since then," Hewson said. "This weakness has been reflected in price pressures in the Chinese economy with the economy slipping into deflation in July, although we have seen a modest uptick in headline CPI since then to 0%."

Closer to home, Eurozone industrial production figures are due out at 1000 ET, and are expected to show that the annual rate of output change worsened to -3.5% in August, from -2.2% July. ECB president Christine Largarde is also scheduled to make a speech later in the afternoon.

Oil prices were jumping again, with Brent crude up 2.2% at $87.91 a barrel after the US imposed sanctions on two oil tanker owners for carrying Russian oil priced about the G7 price cap. The news helped the share prices of BP, Shell, TotalEnergies and Repsol.

Germany carmake Porsche was edging higher early on after reporting a 10% increase in global deliveries across the first three quarters