European stocks largely lower; Powell speech, German industrial output in focus
By Peter Nurse
Investing.com - European stock markets largely slipped lower Wednesday, weighed by the hawkish tone from Fed head Jerome Powell overnight, but stronger-than-expected German industrial production data has limited losses.
At 03:50 ET (08:50 GMT), the DAX index in Germany traded largely flat, while the CAC 40 in France dropped 0.1%, and the FTSE 100 in the U.K. fell 0.3%.
Sentiment in Europe is weak Wednesday, with investors taking their lead from the losses on Wall Street overnight, with the benchmark Dow Jones Industrial Average falling nearly 600 points, or 1.7%.
This followed Federal Reserve Chair Jerome Powell stating that the ultimate level of interest rates is likely to be higher than previously anticipated, in prepared remarks to the Senate Banking Committee, at the start of his two-day testimony to Congress.
Powell also said that the central bank was prepared to increase the pace of rate hikes, if the data warranted, suggesting an increased likelihood of a 50-basis point hike in March, a larger increase than the 25-bps raise that had been widely expected.
However, losses in Europe have been limited by the release of data showing German industrial production rose 3.5% on the month in January, a rebound from the revised 2.4% fall the prior month.
While German consumers are still under pressure, with retail sales falling 0.3% in January, the industrial output figures point to the euro zone’s largest economy weathering the impact of the soaring energy prices better than had been expected.
European Central Bank President Christine Lagarde is scheduled to speak in Geneva later in the session, while revised euro zone gross domestic product figures for the fourth quarter are also due.
In the corporate sector, Adidas (ETR: ADSGN ) stock fell 1.2% after the German sportswear retailer announced plans to slash its dividend as a consequence of the financial hit the sportswear giant took after the termination of its partnership with rapper and fashion designer Ye (Kanye West).
Legal & General (LON: LGEN ) stock fell 1.9% despite the U.K. financial services group raising its dividend by 5% after posting a 12% rise in net profit in 2022.
Continental (ETR: CONG ) stock rose 4.3% after the German tire supplier forecast higher margins for the current year as the auto market improves.
Oil prices edged lower, but losses were mitigated by a surprise reduction in U.S. oil stocks of about 3.8 million barrels in the week ended March 3, according to data from industry body American Petroleum Institute .
If confirmed by the official data later Wednesday this would be the first decline after 10 straight weeks of builds, and would suggest a tightening of supplies in this important market.
By 03:50 ET, U.S. crude futures traded 0.5% lower at $77.17 a barrel, while the Brent contract fell 0.4% to $82.99. Both benchmarks fell over 3% last session as investors braced for steeper U.S. rate hikes.
Additionally, gold futures fell 0.1% to $1,817.55/oz, while EUR/USD traded 0.1% lower at 1.0540.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.
Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb
Drop an image here or