By Barbara Kollmeyer
European stocks and U.S. equity futures traded flat on Wednesday, a day ahead of key consumer prices Stateside, while a sharp rise in Chinese factory prices sent shares of miners lower. Airlines were among the gainers, after easing travel rules from the U.S. and a virus pass approved by EU lawmakers.
The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP -0.90% was flat at 453.73, in a week that has seen the index rise about 0.3% so far. The German DAX /zigman2/quotes/210597999/delayed DX:DAX -0.72% fell 0.7%, the French CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 -0.95% was flat, and the FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX -0.38% was down 0.2%.
U.S. stocks /zigman2/quotes/210598065/realtime DJIA +0.10% /zigman2/quotes/210599714/realtime SPX +0.15% opened mixed, with gains for the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -0.03% as markets adopted a wait-and-see mode ahead of Thursday’s crucial consumer-price data for May.
A much sharper-than-expected rise in April prices last month temporarily shook up markets. Investors are waiting to see if strong inflation data will prompt the Federal Reserve to pull back on its accommodative monetary stance, which could turn into a headwind for stocks.
While inflation is rising at a far less heated pace in the eurozone, markets will be closely watching Thursday’s European Central Bank monetary policy decision , particularly to see if the central bank will keep its current pace of bond purchases intact.
Fresh signs of global pricing pressures emerged from China on Wednesday, after factory-gate prices rose in May at their highest pace in nearly 13 years , driven by surging global commodity prices. China’s consumer inflation remained tame in May, thanks to subdued food prices.
Mining stocks responded to the Chinese data with losses, with shares of heavily weighted Rio Tinto /zigman2/quotes/208934945/delayed UK:RIO -0.57% /zigman2/quotes/202627887/composite RIO -0.42% , Anglo American /zigman2/quotes/201381512/delayed UK:AAL -0.04% and Glencore /zigman2/quotes/201400686/delayed UK:GLEN +0.36% all down by more than 2%.
Travel-related stocks were climbing on a double dose of optimistic news for the sector. The U.S. Centers for Disease Control and Prevention eased travel restrictions for several European countries , including France, Spain and Italy, which are now Level 3, which means Americans can travel to those countries but must be fully vaccinated against COVID-19. The U.S. recommends against travel to countries with Level 4 ratings.
As well, EU lawmakers approved a widely awaited vaccine certificate, aimed at saving Europe’s travel industry from another damaging vacation season.
Shares of Aéroports de Paris /zigman2/quotes/203616065/delayed FR:ADP +2.81% climbed 9%, Air France-KLM /zigman2/quotes/205396176/delayed FR:AF +3.09% and Deutsche Lufthansa /zigman2/quotes/201210530/delayed XE:LHA +0.52% rose more than 3%. Shares of International Consolidated Airlines /zigman2/quotes/208070069/delayed UK:IAG +1.96% rose 4%, easyJet /zigman2/quotes/202825892/delayed UK:EZJ +4.10% , and Wizz Air /zigman2/quotes/210449062/delayed UK:WIZZ +0.27% rose more than 2%.
Shares of Spain’s Industria de Diseño Textil /zigman2/quotes/203681809/delayed ES:ITX -1.19% , which is known as Inditex and owns Zara and other clothing chains, fell 2%. The retailer said it swung to a net profit for the first quarter of the fiscal year, as sales returned to growth.
“While the resilience shown by Inditex should be commended, the retailer isn’t out of the woods yet. Operating costs rose, as stores reopened and the group continued its push online and profits are still less than half of pre-pandemic levels,” said Laura Hoy, equity analyst at Hargreaves Lansdown, in a note to clients.
Automobile makers were weak in Germany, with shares of German auto maker Daimler /zigman2/quotes/216301243/delayed DE:DAII +0.56% down 2%.
Volkswagen /zigman2/quotes/203434344/delayed XE:VOW3 +0.04% shares dropped 1.2%. The company announced that Martin Winterkorn, its former chief executive officer, will pay €11.2 million ($13 million) in compensation for what the company said was a failure by him and other former managers to quickly figure out the 2015 diesel engine emission-cheating scandal. His payment is part of an overall €288-million settlement.