European stocks straddled the flat line on Thursday, amid mixed results from a bevy of blue chip companies, with disappointing results from Credit Suisse and a warning over inflationary pressures from Unliever.
The Stoxx Europe 600
traded flat at 473, following Wednesday’s gains. The euro
rose 0.1% and the pound
was up 0.4%. Closely-watched U.S. inflation data came in at a higher-than-expected 7.5% annual gain, staying at a 40-year high and putting more pressure on the Federal Reserve to tighten monetary policy.
Economists surveyed by The Wall Street Journal were forecasting January consumer price inflation will rise 7.2% annually, following a nearly 40-year high of 7% in December. U.S. stocks slipped in early action, and the yield on the 10-year Treasury note
hit 2% for the first time since 2019.
Bond yields have been ratcheting up globally on expectations of central bank policy tightening, though the fallout from the COVID-19 pandemic continues to linger. The yield on the 10-year German bund
jumped 5 points on Thursday to 0.265%.
Read: Will hot inflation data kill the stock-market bounce? What investors want to see
Earnings also drove the action in Europe. Near the top of the gainers’ list, Siemens’
stock climbed more than 5%, after the German engineering and technology conglomerate reported forecast-beating revenue and orders, which jumped 42% on a comparable basis.
Several major banks reported, including Société Générale
which reported a net profit rise that beat analysts’ expectations, and set a shareholder distribution policy equivalent to 2.75 euros ($3.14) per share. Those shares jumped over 3%.
Credit Suisse shares
meanwhile, tumbled 6%, after the Swiss bank reported a wider-than-expected fourth-quarter loss as revenue fell. The bank warned 2022 will be a year of transition as its balance sheet and reputation have taken hits, with 2021 marked by massive losses from the twin collapse of Greensill Capital and Archegos Capital Management.
Shares of consumer-goods giant Unilever
fell more than 1%. The company reported higher 2021 net profit that beat market expectations, and said it plans to launch a share buyback program worth up to $3.43 billion. But it warned of rising costs due to inflationary pressures, in the first half of 2022 that could total more than €2 billion ($2.2 billion).
“This may moderate in the second half to around €1.5 billion, although there is currently a wide range for this that reflects market uncertainty on the outlook for commodity, freight and packaging costs,” the company said.
Another big name was AstraZeneca
which reported higher revenue, but swung to a fourth-quarter loss due to a charges related to its acquisition of Alexion Pharmaceuticals. The U.K.-Swiss pharmaceutical group expects to incur a $2.1 billion post-acquisition restructuring charge. Shares climbed nearly 5%.
Shares of ArcelorMittal
dropped 0.8%, after Europe’s biggest steelmaker reported higher fourth-quarter sales and adjusted earnings, helped by higher steel prices. But earnings fell short of expectations.