European stock markets pushed higher on Thursday as traders waited for news of the latest EU inflation data.
In London, the FTSE 100 (^FTSE) was trading 0.05% higher after opening, while the CAC (^FCHI) gained 0.2% in Paris as the French economy shrank unexpectedly in the last quarter.
The Frankfurt DAX (^GDAXI) was almost 0.3% higher, and the Stoxx 600 (^STOXX) advanced 0.1%.
It comes as the consumer price index (CPI) is expected to drop to 2.7%, from 2.9% in October, closer to the European Central Bank’s (ECB’s) target of 2%, bringing 2024 rate cut bets into view. Core CPI is expected to slow to 3.9% from 4.2%.
The latest flash CPI inflation numbers from Germany and Spain that were released yesterday, showing that inflation in Europe is tumbling at an accelerated rate.
Meanwhile, updated GDP data released this morning showed that France’s economy contracted by 0.1% in the period from July to September.
This was worse than the first estimate of 0.1% growth for Q3, and follows growth of 0.6% in Q2.
“Yesterday saw a broadly positive session for markets in Europe with the DAX outperforming, while the FTSE100 slipped back for the third day in succession, in a month which has seen the UK benchmark underperform significantly compared to the rest of its peers,” Michael Hewson, chief markets analyst of CMC Markets, said.
“The DAX and S&P 500 look set post their best month of gains since November last year as investors start to price in the prospect of rate cuts next year in the face of sharply slowing inflation.”
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Tata Technologies Surges 180% after IPO
The TATA Technologies European Innovation and Development Centre in Leamington Spa, England. Tata Technologies made a blockbuster entry on the stock market as the stock surged up to 180% in the first day of trading.
The Tata Motors’ unit is the first company from the group to go public in nearly two decades and the IPO is valuing it at 567.94 billion rupees (£5.36bn/$6.8bn).
The stock listed at Rs 1,200 apiece on India’s National Stock Exchange and Rs 1,199 per share on the Bombay Stock Exchange (BSE), a premium of 140% over its IPO price. The stock jumped as much as 180% to Rs 1,400 in early trading before paring gains to trade over 160% higher than the IPO price at Rs 1,311.50.
Tata Technologies’ “listing was beyond imagination… and post that, the rally to 1,400 rupees was even more unexpected,” Arun Kejriwal, founder of Kejriwal Research and Investment Services, told Reuters. If the gains hold, Tata Technologies will be the best IPO debut ever recorded in India.
The company is a global engineering services provider that specializes in product development and digital solutions for original equipment manufacturers, with clients across industries such as aerospace, transportation, and construction heavy machinery.
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Dr Martens shares plunge 25% on profit warning
Shares in Dr Martens have plunged by a quarter after it issued its fourth profit warning of the year.
The footwear maker said a tough consumer environment in the US affected sales of its boots.
Sales fell 5% to £396m in the six months to 30 September and pre-tax profits dived 55% to £26m, although this was better than City analysts had expected.
The company warned that the outlook for the following six months had worsened due to slower recovery in its US business.
Sales for the full year are now expected to decline by 8%, while underlying profits are expected to fall below £223.7m.
Shares are mow more than 75% lower than the 370p float price in January 2021.
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French economy shrinks 0.1% in third quarter
The French economy contracted unexpectedly in the last quarter, according to the latest GDP data on Thursday.
This is worse than the first estimate of 0.1% growth for Q3, and follows growth of 0.6% in the previous three month period.
The data revealed that French investment and consumer spending were weaker than expected while trade also pulled GDP lower. Exports fell by 1% while imports were stable.
INSEE said:
The purchasing power of households gross disposable income (GDI) per consumption unit fell slightly (-0.2%) after remaining stable in the previous quarter. The household saving rate fell this quarter to 17.4% of GDI, after 17.9% in the previous quarter.
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Metro Bank plans to cut 20% of its workers
Metro Bank Metro Bank is set to cut 20% of its workers and review whether to remain open seven days a week.
The lender revealed that the measures are part of a strategy to save around £50m a year.
It currently employs more than 4,200 people, and some 850 staff will lose their jobs as part of the move.
Metro Bank said:
“The company is reviewing seven day opening and extended store hours across the store network and is in discussions with the Financial Conduct Authority about the customer implications of any such changes.”
Daniel Frumkin, chief executive, added:
The support shown from our investors through this transaction will allow Metro Bank to accelerate its growth plans, with the new capital allowing us to unlock the potential in the business and deliver sustainable profitable returns as we strive to be the number one community bank.
We remain committed to stores and the high street but will transition to a more cost-efficient business model while remaining focussed on customer service.
These actions alongside other initiatives to reduce costs are expected to deliver savings of up to £50m per year on an annualised basis.
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Oil rises as OPEC to set production levels
Oil prices will be watched closely today as OPEC+ gets set to meet to decide whether to implement further production cuts on top of the ones already agreed.
There has been widespread disagreements on quotas amongst the smaller OPEC members who are reluctant to forego the extra barrels and the revenue that goes with them.
The group have already cut output over the last year, removing around 5 million barrels per day.
Deutsche Bank said that if OPEC+ do not announce cuts then the global oil market would move into an oversupplied position in early 2024.
Meanwhile, Stephen Innes, managing partner at SPI Asset Management, said:
There is increasing speculation that deeper OPEC+ cuts may encounter strong resistance, particularly from the United Arab Emirates and African producers such as Angola and Nigeria.
These countries resist accepting lower production baselines, even under weaker market fundamentals. The dynamics within the OPEC+ alliance continue to play a crucial role in determining production policies and addressing global oil supply challenges.
at the time if writing, US crude oil, or West Texas Intermediate (CL=F), has gained 0.6% to trade at $78.32 a barrel, while Brent crude (BZ=F) also rose 0.6% to $83.63.
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Asia and US stocks
Asian shares were mostly higher overnight ahead of an update on US consumer inflation and a meeting of the OPEC+ oil producers in Vienna.
The Nikkei (^N225) rose 0.5% on the day in Japan, while the Hang Seng (^HSI) finished 0.3% higher in Hong Kong. The Shanghai Composite (000001.SS) was also 0.3% up by the end of the session.
Across the pond, the S&P 500 (^GSPC) fell 0.1% on the day to close at 4,550.58, and the tech-heavy Nasdaq (^IXIC) was 0.2% lower at 14,258.49. The Dow Jones (^DJI) ended flat.
The yield on benchmark 10-year US Treasury bonds was down six basis points to 4.278%, from 4.336% late on Tuesday.
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Coming up…
Good morning and welcome to our rolling coverage of what’s moving markets and happening across the global economy.
Here’s a quick look at what’s on the agenda for today:
7am: Trading announcement: Mitchells & Butlers, Dr. Martens, ME Group
8.55am: German unemployment
10am: Eurozone flash inflation report for November
10am: Eurozone unemployment report for October
1.30pm: US weekly jobless claims
1.30pm: Canada’s Q3 GDP report to be released
3pm: OPEC virtual meeting expected to start
Watch: How does inflation affect interest rates?
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