Europe: Stocks edge lower as heavyweight miners decline
[BENGALURU] European stocks dipped on Thursday, weighed down by a fall in heavyweight miners after commodity prices tumbled, while a rapid rise in US inflation kept risk sentiment at bay.
The pan-European Stoxx 600 index edged down 0.1 per cent, after falling as much as 1.7 per cent earlier in the session, drifting further away from an all-time high.
Basic resources fell 3.0 per cent, leading declines among European sectors, while oil and gas slipped 1.4 per cent. The sectors were among recent market leaders on the back of a surge in commodity prices.
Automakers also shed 0.9 per cent, while defensive names like utilities, healthcare and telecoms rose.
US inflation readings for April pointed to a steady rise, fanning concerns that the Federal Reserve would raise interest rates earlier than expected. However, Wall Street reclaimed lost ground as technology stocks rebounded after open.
"At one point today European markets were down heavily... inflation concerns once again weighed on sentiment, however these lows proved to be short-lived, with the rest of the day spent clawing the bulk, or all of the losses back," said Michael Hewson, chief market analyst at CMC Markets in London.
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"In an extremely fickle environment markets are continuing to wrestle with the dilemma as to whether the current bout of rising inflation prints is transitory in nature."
European stocks have rallied to all-time highs this month, with the Stoxx 600 up almost 9.5 per cent so far this year as economic recovery prospects and strong earnings drew buyers of equities.
British luxury brand Burberry tumbled 4.2 per cent on reporting a 10 per cent drop in annual sales, weighed down by the Covid-19 pandemic.
UK's biggest broadband and mobile provider, BT Group, fell 5.9 per cent as it reported a 7 per cent decline in revenue and a 6 per cent drop in adjusted earnings for the full year.
In another disappointing London stock market debut, shares of Canadian chip company Alphawave plunged by as much as 21 per cent.
British engineering company Rolls-Royce fell nearly 6 per cent, as it stuck to its guidance to turn free cash flow positive at some point during the second half of 2021.
Markets in Denmark, Finland, Norway, Sweden and Switzerland were closed for public holiday.
REUTERS
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