By Barbara Kollmeyer
European stocks traded flat on Friday, but held near record levels as investors absorbed the latest comments from Federal Reserve Chairman Jerome Powell, and fresh data showing inflationary pressures on the rise in China.
The Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP +0.17% traded flat at 436.71. The index rose 0.6% to 436.86 on Thursday, marking a record close. The German DAX /zigman2/quotes/210597999/delayed DX:DAX -0.07% was 0.1% lower and the FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX +0.02% fell 0.3%, while the French CAC /zigman2/quotes/210597958/delayed FR:PX1 -0.21% edged 0.1% higher. The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.0282% and the euro /zigman2/quotes/210561242/realtime/sampled EURUSD -0.0082% were weaker against the dollar.
U.S. stock futures /zigman2/quotes/209948968/delayed ES00 -0.27% /zigman2/quotes/210407078/delayed YM00 -0.25% were also little changed, with Nasdaq-100 futures /zigman2/quotes/210219788/delayed NQ00 -0.27% tilted slightly lower as the yield on the 10-year Treasury note /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y +0.21% crept higher to 1.67%. The yield on the 10-year German bund /zigman2/quotes/211347112/realtime BX:TMBMKDE-10Y +9.96% was up 1 basis point to – 0.315%. The S&P 500 index /zigman2/quotes/210599714/realtime SPX -0.85% logged its 19th record close in 2021 on Thursday, led by technology shares on the back of Treasury yields that have been easing as of late.
Fed Chairman Powell repeated his view that any inflation rise this year would be temporary at a webinar hosted by the International Monetary Fund on Thursday.
But stocks in China and Hong Kong tumbled on Friday after China reported higher consumer prices in March , due to higher fuel prices, while producer prices rose at the fastest pace in over four years.
Investors have spent months fending off concerns that a stronger growth rebound from the pandemic could trigger inflation that central banks would try to cool, possibly through interest rate increases.
“It’s a clear sign of robust demand for goods made in China, as well as indicative of rising costs for raw materials,” said Neil Wilson, chief market analyst at Markets.com.
Elsewhere, German and French industrial production both saw surprise drops in February, as lockdowns hit those economies. But German exports continued to recover in February despite pandemic-fueled lockdown restrictions. Spanish industrial production also stagnated.
Among the stocks on the move, shares of TUI /zigman2/quotes/207049334/delayed UK:TUI +3.34% slid 7% after the company also launched a convertible bond offering worth €350 million ($416 million). The multinational tour and travel company also suffered a technical mishap on a flight that assigned the wrong weight to some passengers, and caused a flight to takeoff 1,200 kilos heavier than it should have been, according to reports on Thursday.
Spain’s Actividades de Construccion y Servicios /zigman2/quotes/201788030/delayed ES:ACS -0.75% confirmed its interest in buying Italian holding company Atlantia SpA’s /zigman2/quotes/208093352/delayed IT:ATL -0.61% stake in toll road operator Autostrade per l’Italia with an enterprise value estimated at between €9 and €10 billion ($10.73 billion to $11.92 billion). Shares of Atlantia climbed 3.3%, while those for construction and engineering company ACS slipped 0.4%.
Shares of Airbus /zigman2/quotes/208224336/delayed FR:AIR +0.25% climbed over 2% after the aircraft maker released deliveries and order numbers late Thursday, reporting 72 deliveries in March.
“While most deliveries were the A320 family, we were heartened by the 8 A350 deliveries in March (vs 2 in Jan and Feb combined). We remain confident about this year, but continue to worry about the longer term supply / demand balance,” said Citi analyst Charles J Armitage.