European stocks saw a dip in markets on Thursday following data that revealed a higher than anticipated increase in U.S. producer prices. This led to uncertainty about the future predictions of interest rates.
There was some market buoyancy early in the trading day due to the expectation that the European Central Bank is likely to cut borrowing costs in the spring season.
Francois Villeroy de Galhau, the Bank of France Governor commented on France Info radio, stating that a reduction is more probable in June. This will however depend on the data available at that time.
The U.S. Labor Department data showed that the producer price index for final demand rose by 0.6% in February, which exceeded the January figure of 0.3%. Producer prices were expected to rise by only 0.3% in February.
The rate of annual producer price growth reportedly increased to 1.6% in February, up from a revised 1% in January.
In retail, a report from the U.S. Commerce Department showed an increase of 0.6% in sales in February, which marked a recovery from a revised slump of 1.1% in the previous month. Retail prices were forecast to rise by 0.8% in February.
The collective European Stoxx 600 index suffered a slight decrease, ending 0.18% down. The UK's FTSE 100 dropped by 0.37% and Germany's DAX stocks fell by 0.11%, while France's CAC 40 improved by 0.29%. Switzerland's SMI ended the day 0.59% down.
In terms of specific country performances, Austria, Belgium, Finland, Ireland, the Netherlands, Portugal, Russia, Spain and Turkey all closed weak. Denmark, Greece and Poland saw gains, while Iceland, Norway and Sweden closed with no significant change.
Among the UK's corporate losers were the Anglo American Plc, Natwest Group, Segro, St. James's Place, Whitbread, Ocado Group and Haleon. Shares of these companies fell by 2% to 6%. Endeavour Mining, Intertek, Barclays Group, Prudential, Bunzl, WPP, Scottish Mortgage, Rio Tinto, Rolls-Royce Holdings, IHP, Antofagast and Schrodders also saw significant losses.
In Germany, Zalando, RWE, Infineon and BMW shed between 2.7 to 3.4% of their value. BASF, Continental, Henkel, Vonovia, Bayer, Fresenius Medical Care, Covestro, Volkswagen, Beiersdorf and Fresenius also ended lower.
In the French market, Vinci, Eurofins Scientific, WorldLine, STMicroElectronics, ArcelorMittal, Societe Generale and Saint Gobain saw their shares depreciate by 1% to 2.2%. BNP Paribas shares also suffered.
Notably, Encavis AG saw a significant gain of over 25% after private equity company KKR launched a 2.8 billion-euro ($3.06 billion) takeover offer for the German independent power producer.
