FX.co ★ Stock markets in Europe are at a loss. The abundance of contrasting news confuses investors

During the trading session on Wednesday, the key stock indicators of Western European states show different directions and refuse to adhere to a single dynamic.

Thus, by the time of writing, the composite index of the leading European companies STOXX Europe 600 decreased by 0.41% to 441.54 points.

The French CAC 40 and the German DAX rose 0.14%, the UK FTSE 100 shed 0.21%, the Italian FTSE MIB gained 0.04% and the Spanish IBEX 35 sank 0.14%.

At the same time, stock indices of Europe showed a frightening multidirectionality following the results of May. Thus, the FTSE gained 0.84%, the CAC 40 plunged 1%, and the DAX jumped 2.1% after four months of permanent decline.

Rising and Falling Leaders

The value of securities of the British footwear manufacturer Dr. Martens Plc soared 22% on the back of the release of data that, at the end of fiscal 2022, the company's pre-tax profit tripled, and revenue grew by 17.5%.

The share price of the German investment company DWS sank 7.4%. The main reason for the fall in quotes was the news of the resignation of DWS CEO Asoka Woehrmann. The day before, the country's law enforcement agencies conducted searches at

Deutsche Bank and its asset management subsidiary.

The capitalization of the British oil company Tullow Oil PLC increased by 1.7%. Earlier, the management of Tullow Oil PLC spoke about the conclusion of a merger agreement with the British oil and gas exploration and development company Capricorn Energy PLC. According to a preliminary estimate by market experts, the value of the combined company could be about $1.79 billion.

Factors of support and pressure on the market

On Wednesday, European investors continue to analyze the previously published statistics on the eurozone.

The Federal Statistical Office of Germany reported that the level of retail sales in the country fell by 5.4% in April compared to March. The published rate of decline in the indicator became the highest over the past year. At the same time, analysts predicted a decline of only 0.2%.

According to the Federal Employment Agency of Germany, in May, unemployment in Germany predictably remained at the level of April (5%), but the decline in the number of unemployed in the country turned out to be worse than expected - 4,000 instead of the expected 5,500.

According to preliminary estimates of experts, the annual inflation rate in the country accelerated to 7.9% in May from 7.4% in April. At the same time, analysts predicted an increase in the indicator only to 7.6%.

In the past month, the indicator of industrial activity in Germany rose to 54.8 points from 54.6 points recorded a month earlier. At the same time, experts expected an increase in the value of the index only up to 54.7 points.

As for the statistics for the UK, the level of retail sales continued to grow in May. According to the British Retail Consortium, this figure soared by 2.8% last month against a 2.7% increase a month earlier. At the same time, the pace of the May increase in the level of retail sales became the highest since the summer of 2011.

The focus of European stock markets on Wednesday is the permanently rising level of inflation in the world. United States Treasury Secretary Janet Yellen said she was "wrong" when she suggested last year that rising inflation in the country would not be a long-term problem.

In addition, Yellen noted that to date, the administration of US President Joe Biden is focused on taking measures to reduce inflation.

Tuesday results

As for the results of trading on Tuesday, European stock indicators showed a decline due to data on accelerating inflation in the euro area.

As a result, the composite index of leading European companies STOXX Europe 600 decreased by 0.72% to 443.35 points.The highest results among the STOXX Europe 600 components were shown by the securities of the German chemical producer Lanxess (+11.2%). The main outsiders in the composition of the STOXX Europe 600 components were securities of the British-Luxembourg chain of stores B&M European Value Retail SA (-15%) and the Swedish packaging manufacturer BillerudKorsnas AB (-8.2%).

The French CAC 40 sank 1.43%, the German DAX lost 1.29% and only the British FTSE 100 showed a slight increase (+0.1%).According to a preliminary estimate by the Eurostat agency, in May, the annual inflation rate in 19 eurozone countries rose to a record 8.1% in the history of observation from 7.4% in April. The main reason for such a spectacular jump in inflation, experts called the permanent rise in the cost of energy resources.

After receiving this news, the anxiety of traders about the prospects for a faster pace of tightening of monetary policy by the European Central Bank has also increased significantly.

An additional downward factor for the market on the eve was data from the French National Statistical Institute Insee, which reported an unexpected drop in the country's gross domestic product in the first quarter of 2022 by 0.2% compared to the previous three months. The decline in the French economy was recorded for the first time since October-December 2020.

Meanwhile, last May, the level of consumer prices in France, harmonized with EU standards, soared in annual terms by 0.7% - up to 5.8%. The resulting figure was a record for the entire time of its calculation.

In April, consumer spending in the country fell by 0.4% compared to March. Experts interviewed earlier predicted an increase of 0.5%.On Tuesday, participants in key European stock markets also evaluated the corporate news of the region's leading companies.

British pharmaceutical company GSK rose 0.3%. The day before, GSK management announced the conclusion of an agreement to purchase the American biotech company Affinivax Inc for $3.3 billion.

Canadian gold miner Yamana Gold soared 6.4% after South African miner Gold Fields announced it was buying the company for $6.7 billion. The deal is scheduled to close in the second half of this year.

Dutch chemical company Royal DSM gained 8%. DSM management spoke about plans to merge with the Swiss flavor manufacturer Firmenich. The transaction is scheduled to close in the first half of 2023.