Europe open: Shares up as German producer prices fall

European shares opened higher on Friday despite a sharp drop in UK retail sales, while German producer prices registered a sharp fall in December.

The pan-European Stoxx 600 index was up 0.45% at 472.56 with all major regional bourses higher. US shares were up overnight, while Asia trade was mixed.

UK retail sales came in lower than expected, down 3.2% month-on-month in December, according to official data. It was the largest fall since January 2021 as the Covid pandemic started to take hold.

“The overall picture is one of consumer caution over the festive trading season. It seems as though trading was pulled forwards as shoppers sought bargains earlier, then held back in December,” said Hargreaves Lansdown analyst Sophie Lund-Yates.

“Questions will now turn to how prolonged and protracted this cut to discretionary spending will be. There’s every chance that households will continue to look for ways to weather the macro-economic storm.”

German producer prices fell more than expected in December, falling 8.6% year on year, the federal statistics office said. Analysts had forecast an 8% decline.

Reporting by Frank Prenesti for Sharecast.com