European stock markets experienced modest declines on Thursday despite the global rally induced by U.S. inflation data, as investors reacted to some downbeat corporate earnings reports.
At 03:25 ET (07:25 GMT), the DAX index in Germany traded 0.1% lower, the CAC 40 in France dropped 0.2%, and the FTSE 100 in the U.K. slipped 0.4%.
Earnings Impacting European Markets
The overall positive sentiment was dampened in European markets due to disappointing corporate updates:
Siemens stock declined nearly 2% following a 2% drop in second-quarter profit at its industrial business, primarily attributed to a slowdown in its flagship factory automation division.
Deutsche Telekom (OTC:DTEGY) stock fell 0.6% despite the telecommunications giant reaffirming its full-year guidance after reporting higher revenue in the first quarter.
EasyJet (LON:EZJ) stock slumped 6% after the budget airline announced a larger-than-expected pretax loss for the first half of the year, although it noted that inflationary pressures on the sector were starting to ease.
In contrast, BT Group (LON:BT) stock surged 9% after the telecoms group raised its dividend and achieved its £3 billion cost-cutting program ahead of schedule.
European Markets vs. Global Trend
The minor losses in European markets contrasted with the global rally seen in Wall Street and Asia. The catalyst for the global optimism was the April U.S. consumer price index (CPI) rising below expectations, raising hopes for potential interest rate cuts by the Federal Reserve, possibly starting in September.
While the European Central Bank (ECB) is expected to cut rates before the Fed, likely in June, market participants are closely monitoring central bank speakers in both Europe and the U.S. for further insights into future monetary policy.
Crude Oil Prices Rise on U.S. CPI and Inventory Data
Crude oil prices continued to climb on Thursday, following gains from the prior session triggered by the U.S. consumer inflation release and a larger-than-expected drawdown in U.S. inventories.
By 03:25 ET, U.S. crude futures were up 0.4% at $78.91 per barrel, while the Brent contract rose 0.3% to $83.03 per barrel. The softer-than-expected U.S. CPI data has raised expectations of lower interest rates, potentially boosting global economic activity and oil demand.
Additionally, gold futures dipped slightly by 0.1% to $2,393.60 per ounce, while the EUR/USD pair traded 0.1% lower at 1.0880.
The market movements reflect ongoing reactions to key economic data releases and corporate earnings updates, shaping investor sentiment and influencing trading patterns across European and global markets.
