Europe midday: Stocks little changed on mixed economic reports|
European stocks were mixed as investors digested a slate of data including the latest batch of service sector surveys, Eurozone GDP data and euro-area retail sales figures.
The Eurozone economy expanded 0.1% quarter-on-quarter in the third quarter, unchanged from its preliminary estimates and in line with market expectations. Compared to a year ago, the economy shrank a seasonally adjusted 0.4% year-over-year in the third quarter, as expected by consensus.
The Eurozone´s service sector PMI edged up slightly to 51.2 in November from 50.9 the prior month, above the 50 level that signals expansion and forecasts for the reading to remain unchanged.
Retail sales in the euro-area unexpectedly declined 0.1% in October, compared to a rise of 0.4% in September. Economists had predicted an increase of 1%.
The data comes a day ahead of the European Central Bank’s (ECB) policy meeting. The bank is keep its monetary policy and interest rates unchanged at 0.25%. Last month the central bank surprised markets by cutting the benchmark rate due to deflation fears.
ECB President Mario Draghi said the Eurozone "may experience a prolonged period of low inflation" and that the central bank was ready to consider using all available policy tools.
Inflation is running at 0.9%, far below the ECB’s target of just under, but close to, 2%.
The Bank of England also holds a meeting tomorrow, when it is anticipated to keep its current policy on hold.
UK service activity expands
UK service sector activity continued to expand in November, albeit at a slower pace, as new business rose at a rapid pace. The Markit/CIPS UK purchasing managers´index (PMI) came to 60, compared to 62.5 a month earlier and the consensus for a reading of 62. Nevertheless, it held above the 50 level that signals expansion.
Shop prices in the UK fell by 0.3% year-on-year in November compared to a 0.5% fall in October, according to the latest survey data from the British Retail Consortium (BRC).
Later, in the US, will be the release of data including MBA mortgage applications, ADP payroll numbers, trade balance figures and new home sales.
Investors are watching economic data closely to gauge the health of the world’s biggest economy ahead of the Federal Reserve’s next policy meeting on December 17th to 18th when the US central bank may announce a scaling back of monetary stimulus.
The Fed has suggested it could start tapering its monthly $85bn bond buying programme as soon as this month’s meeting, prompting some economists to reconsider their initial forecasts of a March 2014 start.
Standard Chartered, Tesco
Standard Chartered declined after saying full-year operating profit at its consumer-banking unit will fall at least 10% due to weakness in Korea.
Tesco climbed after the supermarket reported third quarter sales that matched analysts’ expectations.
Elekta slumped after the maker of radiation-surgery equipment reported second-quarter operating profit that missed forecasts.
Peugeot advanced after Goldman Sachs added the shares to its ‘conviction-buy’ list, citing a capital increase, asset disposals and a probable alliance in China. Renault also edged higher after the broker upgraded the carmaker to ‘neutral’ from ‘sell’.
Sage Group rallied after saying it expects to see revenue growth of 6% by 2015.
Crude oil slides
Brent crude futures fell $0.410 to $112.160 per barrel, according to ICE data.
The euro rose 0.03% to $1.3592.