Europe midday: Shares hold gains; Castellum falls after results

European stocks were higher on Monday with little corporate news to drive sentiment and ahead of US inflation data on Tuesday that was expected to signal the future path of interest rates globally as eyes turned skyward and the latest mystery airborne objects flying into American airspace.

The pan-European Stoxx 600 index was up 0.15% at 0830 GMT with all regional bourses higher. Geopolitical concerns were heightened as it emerged the US air force had shot down an airborne object near the Canadian border, the fourth downed this month.

Investors will also be eyeing US retail sales, while the inflation numbers will be analysed to see if inflation continues to slow. Analysts are forecasting headline and core consumer prices to rise 0.4% for the month, with sales rebounding by 1.6%.

“Mixed messages are resulting in mixed movements as investors ponder the continued resilience of the US economy,” said Interactive Investor head of markets Richard Hunter.

“A renewed spike in Treasury yields implied higher interest rates to come, taking some of the froth from the high growth companies which have seen renewed interest of late. Despite its poorest showing last week since December, the Nasdaq nonetheless remains ahead by 12% in the year to date, in an effort to wipe out the hefty losses of 2022.”

“Another important indicator later in the week revolves around the vital US consumer, as retail sales numbers are released. These are expected to have rebounded slightly and in a separate report US consumer sentiment improved further in February, despite the backdrop of inflationary pressure. Taken together, the inflation and retail sales prints are likely to dictate sentiment in the immediate short term.”

In equity news, Castellum shares fell as the Swedish property company posted fourth-quarter results revealing net income for the year of 1.75bn Swedish krona down from 11.8bn in 2021.

The company cited inflation, rising interest rates, a cautious bond market and global economic slowdown throughout the year. It also said it planned to raise around SEK 10bn via a rights issue to “strengthen its financial position”.

UK housebuilders slid after a slew of rating downgrades by Deutsche Bank, with Persimmon, Taylor Wimpey, Barratt Developments, Crest Nicholson and Redrow all down.

Reporting by Frank Prenesti for Sharecast.com