Europe midday: Shares in cautious mood ahead of US CPI, retail sales

11th Mar 2024 11:22

(Sharecast News) - European shares were lower on Monday after a weak session in Asia and a lack of major corporate or economic data to drive sentiment ahead of US inflation and retail sales data this week.

The pan-European Stoxx 600 index was down 0.5% at 500.75 in early deals, with all major regional bourses lower as investors looked ahead to US inflation data on Tuesday and retail sales on Thursday.

"The Nikkei is down around 3% today, as the markets raise expectations of a rate rise by the Bank of Japan next week. Following on from a poor week for US tech stocks, the sector is under pressure in the land of the rising sun," said Derren Nathan, head of equity research at Hargreaves Lansdown.

"After Nvidia shares had the wind knocked out of their sails last week, semiconductor firm Renesas has taken a big fall, as has the country's biggest automobile manufacturer, Toyota, with the strengthening yen sparking fears over exports."

"US stocks look set to tick down on the open, inching away from record highs seen last week. Mixed jobs data on Friday gave the Federal Reserve plenty to think about, as investors continue to play the waiting game as to when the starting gun for rate cuts will be fired. Despite nonfarm payrolls adding 275,000 against forecasts of 200,000, US unemployment has hit a two year high of 3.9%."

"Policy setter's gaze will now turn to consumer prices, with February's CPI data expected tomorrow. Anything north of the 3.1% forecast for annual rate rises may push expectations of a rate cut further down the road."

In economic news, China recorded its first month of inflation after four months of deflation with the country's consumer price index up 0.7% year on year in February after a 0.8% fall in January.

In equity news, shares in Currys fell after private equity predator Elliott pulled from the race to bid for the UK electricals retailer.

BE Semiconductors led the fallers in sympathy with the hit to its Japan rival Renesas, with a decline of more than 10%. Other shares in the sector were also down, including ASML.

Reporting by Frank Prenesti for Sharecast.com