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European Stocks Edge Higher; U.K. GDP Helps FTSE Outperform

Stock Markets May 12, 2021 09:36
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By Peter Nurse - European stock markets traded higher Wednesday, with the FTSE 100 outperforming after better-than-expected U.K. growth data, although moves are limited ahead of key U.S. inflation data.

At 3:40 AM ET (0840 GMT), the DAX in Germany traded 0.1% higher, the CAC 40 in France rose 0.1%, while the U.K.’s FTSE 100 climbed 0.6%.

Britain's economy grew by a stronger-than-expected 2.1% in March from February, official data showed earlier Wednesday, while gross domestic product shrank by 1.5% in the first three months of 2021, when the country was under a third lockdown.

The Bank of England said last week it expected the world's fifth-biggest economy would recover quickly as coronavirus restrictions are lifted to grow by 7.25% in 2021 as a whole.

While welcome news, global stock markets have been fretting that this growth will result in a sharp jump in inflation, pushing central banks, and the U.S. Federal Reserve in particular, into tightening their ultra-easy monetary policies earlier than they had previously guided for. 

Investors will thus be keeping a close eye on the U.S. consumer price index for April, due at 8:30 AM ET (1230 GMT), which is expected to grow 0.2% from the previous month, a 3.6% jump from last year. 

While the year-over-year reading will be distorted by base effects from last year's pandemic-induced plunge in energy prices, such a jump would be the largest since September 2011. 

Back in Europe, Commerzbank (DE:CBKG) stock rose 6.9% after the German lender swung to a first quarter profit, beating expectations, and Bayer (OTC:BAYRY) stock climbed 3.2% after the German pharmaceutical giant reported a rise in net profit and upheld its outlook for the year.

Ahold Delhaize (AS:AD) stock rose 3.1% after the supermarket operator reported better than expected first-quarter sales on the back of a strong performance online, and UniCredit (MI:CRDI) stock rose 0.8% after new Chief Executive Andrea Orcel reorganized the Italian banking group's top management structure.

On the flip side, Tui (DE:TUIGn) stock fell 1.5% after the world’s biggest holiday company said that it had a total of 2.6 million bookings for this summer, 69% lower than it had at this time of year in 2019.

Oil prices stabilized Wednesday, after a volatile few days, as a drop in U.S. crude stockpiles reassured traders that the recovery in demand remains on track.

U.S. crude inventories fell by 2.5 million barrels for the week ended May 6, according to an estimate released Tuesday by the industry body the American Petroleum Institute. The official government inventory report, due later Wednesday, is expected to largely confirm this report. 

Meanwhile, Colonial Pipeline, the largest fuel pipeline in the United States, has still only restarted a small section in the five days since its shutdown following Friday’s cyber attack, and doesn’t expect substantial restoration of service before the weekend. 

U.S. crude futures traded 0.9% higher at $65.85 a barrel, the Brent contract rose 0.9% to $69.11, while gasoline futures on the New York Mercantile Exchange climbed 0.3% to $2.1452 a gallon.

Additionally, gold futures fell 0.1% to $1,834.35/oz, while EUR/USD traded 0.1% lower at 1.2138.


European Stocks Edge Higher; U.K. GDP Helps FTSE Outperform

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