Nov 25 (Reuters) – European stocks were subdued on Friday as retail stocks came under pressure on fears of a bumpy holiday season due to high inflation and slowing economic growth world.
The pan-European STOXX 600 (.STOXX) remained steady in light morning trading, holding near three-month highs hit earlier this week. U.S. markets remained closed Thursday and will have shortened trading hours Friday due to Thanksgiving.
The European retail index (.SXRP) fell 0.3% on Black Friday, which kicks off the shopping season, amid a worsening cost of living crisis and distracted the football World Cup. The index is among the worst performing sectors in Europe, down 32% since the start of the year.
Property stocks (.SX86P) fell 1.3%, with UK property stocks leading the declines as a survey showed demand for rental accommodation in Britain increased in October, first-time buyers potential buyers postponing their purchases.
Still, the benchmark STOXX 600 index was set for its sixth consecutive week of gains, helped by signs that the US Federal Reserve may be tempering its pace of interest rate hikes as well as a better-than-expected earnings season.
The index has rebounded more than 15% since hitting a low in late September, slightly outperforming a 13% rise in the S&P 500 (.SPX) from its October lows.
“As we are about to enter 2023 and move from inflation to disinflation, we believe that equities should face less pressure from the rate markets,” wrote Emmanuel Cau, European equity strategist. at Barclays, in a morning note.
“However, we caution against extrapolating recent risk into the new year amid a trade-off of still unfavorable growth policy and leading market techniques.”
Investors on Thursday largely looked past the minutes of the European Central Bank’s October meeting, which showed policymakers feared inflation was taking root and rates were therefore unlikely to rise further.
Friday’s data showed the German economy grew slightly more in the third quarter than preliminary figures suggested, supported by consumer spending.
Among individual stocks, Credit Suisse (CSGN.S) slid 1.4% to a record high following plans to raise capital and a weak earnings report this week.
OVHcloud (OVH.PA) climbed 2.1% after the European Investment Bank granted the French software group a 200 million euro ($208.18 million) loan to support its expansion in Europe .
Reporting by Sruthi Shankar in Bengaluru; Editing by Savio D’Souza and Arun Koyyur
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