European equities fall; Chinese data and H&M sales weigh
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As a result of dismal Chinese economic statistics and disappointing sales from H&M, European stock markets fell Wednesday. As of 3:35 AM ET (0735 GMT), the DAX in Germany was down 0.1 percent, while the CAC 40 in France was dropped 0.1% and the FTSE 100 in the United Kingdom was down 0.1%.
In the three months through August, Hennes & Mauritz (ST: HMb), the world’s second-largest fashion retailer, reported dismal sales growth from a year ago, sending its stock down 3 percent. “Lockdowns and restrictions have continued to hamper development, particularly in Asia. However, as restrictions have been eased, sales in store have picked up in many markets while online sales have continued to increase,” H&M said, in a statement.
Inditex (MC: ITX), the world’s largest apparel firm and the owner of the Zara chain, reported sales that were 2 percent higher than pre-pandemic 2019 levels. The company’s shares gained by 0.3 percent during the day. China’s second-largest economy, and the key driver of regional growth, experienced a speed bump in August due to Covid-19 outbreaks and supply bottlenecks, according to statistics released earlier Wednesday.
Compared to July, retail sales climbed 2.5 percent year-over-year, the worst pace since August 2020. Meanwhile, industrial production expanded 5.3 percent year-over-year, the slowest pace since July 2020. On the continent of Europe, consumer prices increased by 3.2% over the course of the year in the United Kingdom in August, a dramatic increase from July’s 2.0%, the highest pace since March 2012. There was no mention of the spike in energy prices that occurred in September, which hit record heights in the United Kingdom on Wednesday after a fire knocked off a vital interconnector connection transporting power from France.
Later Wednesday, Italy’s inflation data will be released, as will the Eurozone’s July industrial production data. As a result of a smaller-than-expected increase in U.S. inflation for August, the timing of the Fed’s reduction of asset purchases has become more ambiguous.
Despite a larger-than-expected decrease in U.S. crude inventories, petroleum prices rose Wednesday on anticipation of a strong increase in demand as countries deal with the current Covid-19 epidemic, according to Bloomberg. In the wake of Hurricane Ida, which shut down refineries and offshore drilling, the American Petroleum Institute issued crude oil supply statistics late Tuesday that indicated a draw of 5.4 million barrels last week. Energy Information Administration data on crude oil supply, anticipated later today, will serve as a confirmation for the market currently.
It was also reported that Covid-19 vaccination rollouts might spur an economic recovery and result in a strong increase in demand of 1,6 million barrels per day next month, with continuous increases through the end of the year. Crude oil futures in the United States were trading 1 percent higher at $71.19 a barrel by 3:35 AM Eastern Time, while crude oil futures in London were trading 1 percent higher at $74.31. There was also a 0.2% drop in gold futures prices, while the EUR/USD traded at 1.1817, an increase of 0.1%.