European Stocks Close Modestly Higher

(RTTNews) - European stocks closed slightly higher on Wednesday amid selective buying even as the mood remained quite cautious amid rising Treasury yields and worries over inflation and looming interest rate hikes.

Data from the Office for National Statistics showed U.K.'s inflation accelerated to a 30-year high in December.

U.S. Treasury yields hit fresh two-year highs amid Fed rate hike expectations.

Benchmark German debt yields turned positive for the first time since before the pandemic as markets braced for a coordinated monetary policy tightening globally.

The pan European Stoxx 600 advanced 0.23%. The U.K.'s FTSE 100 climbed 0.35%, Germany's DAX gained 0.24% and France's CAC surged up 0.55%. Switzerland's SMI edged down 0.03%.

Among other markets in Europe, Denmark, Greece, Iceland, Ireland, Netherlands, Portugal, Russia, Sweden and Turkey closed higher. Austria, Belgium, Czech Republic, Finland and Norway ended weak, while Poland and Spain settled flat.

In the UK market, Polymetal International climbed 7.6%. Burberry Group surged up nearly 6.5% after upgrading its full-year forecasts.

Fresnillo, Unilever, Pearson, Anglo American Plc, Rio Tinto, Flutter Entertainment, Antofagasta, BHP Group and Segro gained 2 to 5%.

Ashtead Group ended 4.4% down, IAG closed lower by 3.4%, DCC declined 2.7% and Sainsbury (J) shed 2.5%. Melrose Industries, GlaxoSmithKline, Rolls-Royce Holdings, Ferguson, Royal Mail and Barclays Group lost 1 to 2%.

In the German market, Zalando spurted nearly 3.5%. HelloFresh and Qiagen both ended higher by about 2%. Deutsche Telekom, Linde, Sartorius, Deutsche Boerse, Siemens, Siemens Healthineers and Puma gained 1 to 1.5%.

Henkel declined 2.4% and Fresenius Medical Care ended 2% down. E.ON., Continental, Deutsche Bank, Fresenius, Infineon Technologies and BMW ended lower by 1 to 1.6%.

Leoni AG shares plunged nearly 11%. The provider of energy and data management solutions for the automotive industry said that searches were carried out at the company sites, as part of investigations by the German Federal Cartel Office into various cable manufacturers and other industry-related companies.

In Paris, LVMH gained 3.7%. Hermes International, CapGemini, Kering, ArcelorMittal, Air Liquide, Essilor and Sodexo moved up 1 to 2.5%.

Air France-KLM, STMicroElectronics, Vivendi, AXA, Faurecia, Societe Generale and Engie ended lower by 1.7 to 3.4%. Valeo and Technip also declined sharply.

In Switzerland, shares of Richemont rallied sharply after the luxury group said its revenue climbed 32% at constant currencies in the last quarter. The world's second-largest luxury group reported strong demand for jewelry and watches.

In economic releases, Germany's consumer price inflation in 2021 hit its highest level in almost 30 years mainly due to the high monthly inflation rates in the second half of the year, Destatis said earlier today.

Consumer prices increased 3.1% in 2021 after rising 0.5% in 2020. A higher year-on-year rate of price increase than in 2021 was last measured in 1993, when prices were up 4.5%.

In December, consumer price inflation rose to 5.3% from 5.2% in November. The rate came in line with the preliminary estimate published on January 6.

The pound edged lower against the euro and was broadly flat against the dollar despite U.K. consumer price inflation surging to 5.4% in December from 5.1% in November.

This was the highest annual inflation rate in the National Statistic data series, which began in January 1997.

Another report from the statistical office showed that U.K. factory gate price inflation slowed marginally in December. Output price inflation decreased to 9.3% in December from 9.4% in November.

Eurozone construction output dropped for the first time in three months in November, data from Eurostat showed. Construction output declined 0.2% month-on-month in November, after a 0.6% growth in October. The fall was the first since August, when output shrunk 1%.

Civil engineering output increased 1%, while building construction declined 0.7% in November. On a yearly basis, construction output rose 0.5% in November, after a 3.6% increase in October.

The euro area current account surplus increased in November, a report from the European Central Bank said. The current account surplus rose to EUR 24 billion in November from EUR 19 billion in the previous month.