Europe close: Stocks struggle for direction as inflation remains muted

European stocks ended the week on a mixed note, as investors analysed a number of contrasting economic reports.

The benchmark Stoxx Europe 600 closed down 0.08%, while Germany’s DAX and France’s CAC 40 were 0.46% and 0.24% higher respectively.

As of 1632 GMT, the euro was down 0.50% against the pound but rose 0.32% and 0.12% against the dollar and the yen respectively, while Brent crude rose 1.35% to $49.47 a barrel.

Mixed data on both sides of the Atlantic

On the economic data front, figures from Eurostat showed unemployment in the Eurozone grew slightly more than expected in September, while consumer prices fell flat in the current month, in line with analysts’ expectations.

Meanwhile, German retail sales were flat compared with a larger-than-initially estimated 0.7% decline in the previous month and analysts’ expectations for a 0.4% drop.

“There has been some good news in the Eurozone, with unemployment falling to a three-year low. Inflation even managed to rise, a fact that will give Mario Draghi pause for breath,” said Chris Beauchamp, senior market analyst at IG.

“He has probably saved the Eurozone from depression, but the full-blown economic recovery he is looking for has yet to arrive.”

Across the Atlantic, consumer spending rose 0.1% month-on-month in September compared with a 0.4% increase in August and with analysts’ expectations for a 0.2% gain.

Elsewhere, according to the latest University of Michigan reading, the index monitoring consumer sentiment declined to 90.0 from 92.1 in September, falling short of the 92.5 reading analyst had expected.

Meanwhile, the Chicago PMI, surged back into positive territory in October, rising to a level of 56.2 from 48.7 in September, the highest level since January.

Mixed earnings

In company news, L’Oreal tumbled 4.57% after its third-quarter revenue missed analysts’ expectations, while British Airways and Iberia parent International Consolidated Airlines Group fell 3.54% as quarterly numbers fell short of estimates.

On the upside, oil and gas company BG Group gained 0.20% after its third-quarter core earnings came in better than expected, as it raised its full-year production guidance following a sharp increase in output in the period.

Airbus gained 3.38% after reporting a 12% rise in third-quarter core earnings from the same period a year ago and announcing the buyback of €1.1bn of shares.

BNP Paribas was 1.77% higher after it posted a 14% rise in net income, beating analysts’ expectations, while Belgium-based brewer Anheuser-Busch InBev advanced 1.57% after it said core earnings rose 9.6% in the third quarter.

French car maker Renault rallied 5.25% after it said third-quarter revenue increased by 9.4%.