Europe midday: Shares lower as EZ CPI cools less than expected

European stocks were lower at midday on Thursday as eurozone inflation eased slightly less than expected in January, while Volvo shares surged on news it the Swedish car giant was offloading its stake in electric vehicle maker Polestar.

The pan-European Stoxx 600 index was down 0.13% at 485.05 with most major markets lower. Spain’s IBEX continued its rally after upbeat GDP data this week, while Britain’s FTSE 100 outperformed with a 0.51% gain.

In economic news, eurozone inflation in seasonally adjusted terms fell at a month-on-month pace of 0.4%. That served to push the annual rate of increase in headline CPI down by one tenth of a percentage point from the month before to reach 2.8% - just as expected by economists.

At the core level however, which excludes alcohol, energy, food and tobacco, CPI dipped from 3.4% to 3.3%, against forecasts for a decline to 3.2%.

In a separated announcement, joblessness in the single currency bloc was little changed at the end of 2023. According to Eurostat, the ranks of the unemployed contained approximately 10.91m euro area residents in December, versus 10.93m during the previous month.

That meant that the rate of unemployment was unchanged at 6.4%.

Earlier in the day, a widely-watched survey revealed the slump in the eurozone’s manufacturing sector eased in January, with factory output and new orders declining at their softest rates since last April, according to PMI survey data.

The HCOB Eurozone Manufacturing PMI, compiled by S&P Global, rose to 46.6 in January, up markedly from 44.4 in December to its highest level in 10 months although still well below the 50 mark that separatres contraction from expansion.

Cutbacks to purchasing activity, stocks of inputs and employment also cooled, while business confidence rose to a nine-month high. Decreases in both input costs and output prices gathered momentum in January, despite suppliers’ delivery times lengthening for the first time in a year following disruption to ships passing through the Red Sea.

In equity news Volvo Cars shares surged more than 20% in early after the Swedish automaker said it will stop funding subsidiary Polestar Automotive.

Swedish medical equipment maker Getinge fell after reporting a smaller than expected rise in fourth-quarter earnings.

BNP Paribas shares fell more than 8% after the French bank reported a quarterly sales miss and pushed back a profit target.

Reporting by Frank Prenesti for Sharecast.com