Europe close: Stoxx finishes flat as UK losses provide a drag

The pan-European Stoxx 600 closed down 0.07% at 485.27 as the index continues to trade near record highs.

London's FTSE 100 declined 0.4% on the day, dragged lower by heavy falls from AstraZeneca and Mondi. The CAC in Paris was heading the other way, gaining 0.7% helped by decent performances from luxury peers Kering, LVMH and Hermes, along with French-listed shares of steel giant ArcelorMittal.

Meanwhile, markets in Frankfurt and Milan rose 0.3% while Madrid stocks gained 0.2%

With no major economic data from Europe to digest, markets were focused on China's deflationary woes as the decline in consumer prices accelerated at its fastest pace in 15 years in January, with weak demand continuing dragging on efforts to bolster the struggling economy.

The Chinese consumer price index fell 0.8% year-on-year in January, faster than the 0.5% expected. It marked the fourth straight month of declines and the biggest contraction since the 2008 financial crisis.

"Given the situation in China, the sense here is that unless the government announce a widespread fiscal stimulus package, measures aimed at reviving the stock market will simply feed into speculator profits and won’t translate into better demand, providing short-lived positive effects," said Manoj Ladwa, director at ARJ Capital.

ArcelorMittal, Adyen, DS Smith and Unilever on the rise

Shares in steel production giant ArcelorMittal gained in Amsterdam after the company pointed to a "more constructive" outlook for the industry following a challenging year in which profits shrunk by 90%. The company, which reported a net profit of just $0.9bn for the 2023 financial year, down from $9.3bn in 2022, said it is now "on the cusp of a step change in profitability".

Adyen surged to the top of the Stoxx with a 22% rise as earnings beat expectations, helped by higher sales and stricter cost control. The Dutch ecommerce platform and payments processor hopes to recover after surprising the market with a profit warning last August.

London's DS Smith surged 10% after confirming it has received "a highly preliminary expression of interest" from packaging rival Mondi, which declined on the news. Mondi, which has until 7 March to put up or shut up under UK takeover rules, confirmed it is in the early stages of considering a possible all share combination with DS Smith.

Consumer goods giant Unilever, which is listed in London and Amsterdam, saw a welcome reaction from the market to a €1.5bn share buyback as it reported a return to volume growth in the final quarter of 2023.

In contrast, Danish shipping giant Maersk tanked 16% after suspending its share buyback programme as it warned that oversupply and disruption in the Red Sea would impact earnings this year.

French banking group Societe Generale disappointed with a 7.6% drop in full-year revenue to €25.1bn, with fourth-quarter revenues falling 9.9%.

Meanwhile, biopharma titan AstraZeneca was providing a big drag in London after annual profits came in slightly under analysts' forecasts. Core earnings per share were up 15% on the year at $7.26, but fourth-quarter core EPS rose by a lesser 7% to $1.45, which was a 3% miss against consensus forecasts.

Other heavyweights in the pharma sector were also falling on Thursday, including GSK, Sanofi and Novartis.