European Stocks Close Lower After Cautious Session

European markets closed mostly lower on Tuesday after a choppy session as investors remained reluctant to make significant moves amid concerns over inflation and rising bond yields.

Stocks came off early lows after investors reacted positively to Federal Reserve Chair Jerome Powell’s prepared remarks before the Senate Banking Committee.

Powell reiterated interest rates will remain at near-zero levels and the Fed will continue its asset purchases at the current rate until “substantial further progress” has been made toward its goals of maximum employment and price stability.

“The economy is a long way from our employment and inflation goals, and it is likely to take some time for substantial further progress to be achieved,” Powell said.

Markets were also digesting the latest batch of economic data, and tracking updates on virus cases and easing of lockdown restrictions in several parts across the continent.

The pan European Stoxx 600 slid 0.42%. Germany’s DAX ended 0.61% down, while the U.K.’s FTSE 100 and France’s CAC 40 advanced 0.21% and 0.22%, respectively. Switzerland’s SMI declined 0.83%.

Among other markets in Europe, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Poland, Portugal, Sweden and Turkey ended lower.

Austria, Norway and Spain closed on a positive note, while Belgium and Czech Republic ended flat.

In the UK market, Scottish Mortgage ended more than 5% down. Pershing Square, Polymetal International, Ocado Group, Avast, Flutter Entertainment, Aveva Group, Evraz, Just Eat Takeaway, Antofagasta, ICP and Intercontinental Hotels lost 1.6 to 3.2%.

HSBC Holdings drifted lower after it abandoned its long-term profitability targets and unveiled a revised strategy focused mainly on wealth management in Asia.

On the other hand, British Land Co., Land Securities, Pennon Group, Informa, Barclays Group, BAE Systems, Pearson, Unilever, Hikma Pharmaceuticals, Lloyds Banking Group and Melrose gained 2 to 5.4%. Reckitt Benckiser, IAG, Associated British Foods, Burberry Group adn Natwest Group also ended notably higher.

In the German market, Deutsche Post, Infineon Technologies, BMW, Daimler, Merck, Volkswagen and Siemens lost 1 to 3.3%. HeidelbergCement lost more than 2% after its revenue fell in the fourth quarter of last year.

Lufthansa, Allianz, Linde, Deutsche Bank and E.ON gained 1 to 2%.

In France, Technip, STMicroElectronics, Dassault Sytemes, ArcelorMittal, Cap Gemini, Carrefour and Michelin ended notably lower, while Safran, Airbus Group, Sodexo, Accor, Air France-KLM, Vinci, Unibail Rodamco and Total gained 2 to 3.5%. Thales, Bouygues, Veolia and Publicis Groupe also closed higher.

In economic news, The UK unemployment rate increased in the fourth quarter, coming in at 5.1%, data from the Office for National Statistics showed. That was 0.4 percentage points higher than the previous quarter. At the same time, the estimated employment rate dropped 0.3 percentage points from the prior quarter to 75%.

UK retailers expect sales to fall sharply next month, according to the Distributive Trades Survey results from the Confederation of British Industry, published Tuesday. A net balance of 45% said sales declined in the year to February compared to -50% in January. However, a net 62% forecast sales to decline further in March.

Eurozone consumer prices increased for the first time in six months in January, as initially estimated, final data from Eurostat showed. The harmonized index of consumer prices climbed 0.9% year-on-year in January, reversing a 0.3% fall in December. A year earlier, the rate was 1.4%.

Data from the Federal Statistical Office showed Switzerland’s producer and import prices declined in January, falling 2.1% year-on-year. The producer price index decreased 1.2% annually in January and import prices decreased 3.9%. On a monthly basis, producer and import prices rose 0.3% in January.

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