(Reuters) – European stocks closed flat on Tuesday, with miners, banks and luxury stocks leading to declines as optimism over slowing US inflation growth in August proved short-lived .
The regional STOXX 600 index edged down 0.01%, with the basic resources sector index falling 1.9% and banks down 1.1%.
“After a positive start yesterday, price action today is expected to follow last week’s pattern, where after a similar rally on Monday sentiment has deteriorated as concerns over profit margins face the upside. prices have seen some sectors come under additional pressure, “said Michael Hewson, chief market analyst at CMC Markets UK.
Luxury stocks, including LVMH, Kering, Richemont and Burberry, fell between 1.9% and 3%, following moves in Asia over concerns over the spread of COVID-19 cases in China.
“The current concerns and lockdowns of the coronavirus in China in several cities in Fujian are not helping the sentiment,” said Mark Taylor, salesperson at Mirabaud Securities.
Home to many luxury names, the French CAC 40 fell 0.4%, while the British FTSE 100, with a high concentration of miners, fell 0.5%.
Still, many strategists expect European stocks to outperform this year due to the relatively high vaccination rate and catch-up trading in cheaper segments of the market such as banking and energy.
Data earlier in the day showed that underlying US consumer prices rose at their slowest pace in six months in August, suggesting inflation was likely to have peaked, albeit at a peak. may remain elevated for some time amid persistent supply constraints.
The report supported sentiment for a brief midday moment as investors hoped the US Federal Reserve would likely delay its announcement to cut monetary stimulus.
“While we initially saw the markets soar on the prospect of a more patient Federal Reserve, we have since seen traders realize that today’s data is unlikely to push the Fed to change course, ”said Joshua Mahony, senior market analyst at IG.
Pandora, the world’s largest jewelry maker, rose 6.8% after increasing its profit target for years to come and lifting its share buyback plan.
JD Sports Fashion jumped 9.7% after posting record first-half profit as closures eased and people visited its stores in Britain.
Dutch specialty chemicals maker DSM hit an all-time high after announcing it was considering selling its materials division.
Danish brewer Carlsberg fell 3.5% after a double downgrade to “sell” by Berenberg.
Reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta, Saumyadeb Chakrabarty and Gareth Jones