Major European markets didn't manage to maintain their initial gains on Friday, with inflation concerns and cautiousness due to the upcoming Federal Reserve and Bank of England monetary policy announcements leading to a close in the red.
The all-European Stoxx 600 finished 0.32% lower, while the UK’s FTSE 100 decreased by 0.15% and the German DAX declined by 0.03%. The French CAC 40 witnessed a slight increase of 0.04%, whereas the Swiss SMI closed down by 0.38%.
Most European markets such as Belgium, Denmark, Iceland, Netherlands, Poland, and Turkey also closed weakly. In contrast, Austria, Greece, Ireland, Norway, Portugal, Russia, Spain, and Sweden ended on a high note while Finland remained flat.
Post the revelation of U.S. consumer price and producer price inflation data, the CMW FedWatch Tool showed a hike in the probability of a policy rate freeze at the Fed's June meeting, rising from a 25% to a 40% chance.
In economic news from Europe, France's consumer price inflation in February was reported to have slightly softened to 3%, a marginal decrease from January's 3.1%. The EU-harmonized inflation also slowed down to 3.2% in February from January's 3.4%.
In the UK, household product giant Reckitt Benckiser faced a dramatic 16% drop after being ordered by an Illinois jury to compensate a woman with $60 million following the death of her prematurely-born baby from an intestinal disease linked to their Enfamil product. The group has stated its intent to fight this verdict.
Other UK businesses, including Intertek, GlaxoSmithKline, Smith & Nephew, Halma, The Sage Group, and British American Tobacco, also closed significantly lower. However, Vodafone surged by more than 5% following the announcement of its binding agreement to sell Vodafone Italy to telecom service provider Swisscom AG for a value of 8 billion euros.
In the German market, real estate firm Vonovia saw a fall of more than 10% following reports of their largest ever loss in 2023. Similarly, Infineon dropped by around 6% and Fresenius Medical Care by nearly 4%.
On the French market, investors witnessed substantial to moderate losses for companies such as STMicroElectronics, Unibail Rodamco, L'Oreal, ArcelorMittal and LVMH. Conversely, Worldline experienced a near 4% gain, with other companies including Stellantis, BNP Paribas, Alstom, Airbus Group, Michelin, Societe Generale, Orange, Renault, Saint-Gobain, AXA, Safran, and Teleperformance increasing by 1 to 3 percent.
