European stocks closed higher on Thursday as investors seemed to overcome worries about high levels of inflation on the continent.
The pan-European index Stoxx 600 closed at 483.36 points, strengthened by 0.51%, with the travel and leisure sector leading the profit, with 2.7%, while the car loss sector, with 0.9%. The other pan-European index, Eurostoxx 50, with the “heavy papers” of the eurozone, gained 0.73%, to 4,299.61 points.
The German DAX recorded an increase of 0.65%, to 15,912.33 points, with the French CAC 40 to increase by 0.30%, to 7,194.16, while the British FTSE 100 fell marginally by 0.06%, to 7,585.01.
On the periphery, the Italian FTSE MIB recorded gains of 0.73%, at 27,570 points, while the Spanish IBEX 35 increase 0.45%, to 8,814.60.
Corporate results were among the factors that had the greatest impact on the market. The share of the Swiss Zur Rose Group, the online drug sales sector, rose 5.4%, after the strong performance it announced in the quarter. The British fast food delivery company Deliveroo saw its share strengthen by 1.4%, after announcing a jump of 70% in the total value of orders received in 2021.
France’s Soitec saw its share sink 18.2% to the bottom of the pan-European index after announcing that Atos CEO Pierre Barnabe would succeed outgoing CEO Paul Boudre.
Dutch investor Prosus, meanwhile, saw its share rise 6.5% after Goldman Sachs announced it was continuing to cover it, even giving it a “buy” recommendation.
Inflation in focus
Markets around the world have turned their attention to the rising yields on US government bonds, but also to corporate results this week. Inflation data also play a key role, with the United Kingdom hitting a 30-year high of 5.4% in December as energy costs, demand warming and supply chain problems have pushed consumer prices internationally.
Eurozone inflation could easily “hang” above the 2% target in the medium term and in this context the European Central Bank should leave the door open for tightening its policy, some central bank officials estimated at last month’s meeting, as the minutes of the meeting showed today.
At its December meeting, the ECB decided that the pace of economic recovery would allow for a gradual slowdown in asset purchases in the coming quarters.
The ECB ‘s decisions, however, were not unanimous the minutes of the meeting showed different assessments in terms of inflation prospects, with some officials warning of the risk that inflation will eventually exceed forecasts.
There was a warning that “a scenario with inflation ‘at a higher level and for a longer period’ can not be ruled out,” the minutes of the December 16 meeting said.
“For 2023 and 2024, inflation in the baseline scenario was already relatively close to 2% and, given the upside risks in the forecasts, could easily exceed 2%.”
Five of the 25 members of the Board disagreed with the December decisions, an unusually large group of dissidents for a body that seeks its decisions to be unanimous, according to Reuters.