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Investing.com - European stock markets edged largely lower Wednesday amid caution ahead of key U.S. inflation data, even after the release of better-than-expected French industrial production.
At 03:25 ET (08:25 GMT), the DAX index in Germany traded largely flat, the CAC 40 in France traded down 0.1% and the FTSE 100 in the U.K. fell 0.2%.
French industrial production grows strongly
Data released earlier Wednesday showed that French industrial production rose 0.5% on the month in November, more than expected.
However, this followed on from the equivalent data from Germany, released on Tuesday, falling on a month-on-month basis for the sixth month in a row, as the eurozone’s largest economy continued to struggle in the face of high energy prices and elevated interest rates.
Additionally, German construction spending is set to fall in 2024 for the first time since the financial crisis, according to a study by the DIW economic institute, as the property industry suffers its worst crisis in decades.
Stock markets rose sharply towards the end of last year on hopes that global central banks would start cutting interest rates early in 2024.
However, inflation in the eurozone rose to 2.9% in December, reversing six months of consecutive falls, creating doubt as to when the European Central Bank would move lower.
Elsewhere, Australian inflation took a further move lower, which brings Thursday's U.S. consumer prices in focus, where a slowdown is also anticipated and needed to avoid a sharp selloff given a series of U.S. rate cuts are priced in for this year.
A speech by New York Fed President John Williams will also be studied carefully, as the influential policy maker has been on the hawkish side of the rate cut debate.
J Sainsbury maintains full-year profit guidance
In the corporate sector, J Sainsbury (LON:SBRY) stock fell 3.5% after the U.K.’s second-largest supermarket chain maintained its profit guidance for the financial year even after posting a sharp rise in grocery sales over the important festive period.
This follows sales of general merchandise falling during the period, with Christmas clothing sales falling 6%.
By contrast, Greggs (LON:GRG) stock soared around 10% after the U.K. bakery chain declared that inflation pressures are “reducing”, as it reported a strong rise in sales last year.
The chip sector will also be in focus Wednesday, after TSMC (NYSE:TSM), the world’s largest contract chipmaker, reported largely flat fourth-quarter revenue, but that still beat both the company's and market's expectations.