European Stocks Close Lower On Profit Taking

European stocks ended lower on Wednesday with investors staying largely cautious and booking profits after recent strong gains.

Activity was mostly stock specific in the markets with quarterly earnings reports and other corporate news providing some direction.

Investors were also tracking updates on coronavirus cases, the latest batch of economic data from the continent and news about U.S. stimulus plan.

The pan European Stoxx 600 ended lower by 0.23%. The U.K.’s FTSE 100 slid 0.11%, Germany’s DAX lost 0.56% and France’s CAC 40 declined 0.36%, while Switzerland’s SMI bucked the trend and gained 0.2%.

Among other markets in Europe, Belgium, Denmark, Ireland, Norway, Poland, Portugal, Russia and Spain drifted lower.

Czech Republic, Finland, Greece, Iceland and Turkey closed higher, while Austria, Netherlands and Sweden ended flat.

In the UK market, Ocado Group slid 7%. Compass Group, Berkeley Group Holdings, Taylor Wimpey, IAG, Barratt Developments and Next lost 2 to 5%.

Persimmon shares declined sharply after the company said it has made a provision of 75 million pounds in its 2020 results to pay for its contribution to any necessary work on 26 buildings that may be affected by cladding safety issues.

Among the gainers, Anglo American moved up 4.75%, Glencore and Rio Tinto both ended higher by about 2.7%, while Smith DS, Prudential, Aviva, British Land Company, Smurfit Kappa Group, Standard Chartered and Evraz advanced 1.5 to 3%.

In the German market, MTU Aero Engines, Infineon Technologies, Bayer, Adidas, Linde, Lufthansa, SAP and Deutsche Post lost 1 to 3%.

Thyssenkrupp ended more than 6% up after it raised its full-year outlook citing improved demand. Fresenius Medical Care, Fresenius, Siemens and Deutsche Bank gained 1.4 to 3%.

In France, STMicroElectronics, Accor and Air Liquide lost 2 to 3%. After posting better-than-expected full-year sales, Air Liquide said it aims to deliver recurring net profit in 2021.

Sodexo, Valeo, LVMH, Sanofi and Renault also ended notably lower.

On the other hand, Unibail Rodamco, BNP Paribas, WorldLine, Publicis Groupe, Orange and ArcelorMittal gained 1 to 3.5%.

Societe Generale shares gained nearly 3% after the bank reported a forecast-beating net profit of 470 million euros for the fourth quarter, helped by “significant improvement” in the business during the second half of 2020.

In economic news, German consumer price inflation turned positive for the first time in seven months in January as the temporary reduction in VAT rates ended in December, final data from Destatis showed.

The consumer price index rose 1% year-on-year after a 0.3% fall in December. A positive inflation rate was last seen in June 2020, when prices were up 0.9%.

French industrial production declined for the second straight month in December, falling unexpectedly by 0.8% month-on-month, data from the statistical office Insee showed. Output was expected to rise 0.2%.

Manufacturing output dropped 1.7%, in contrast to an increase of 0.7% in the previous month. This was the first decline since April 2020, when output plunged 22.5%.

Sweden’s central bank maintained its key interest rate and the asset purchase programme, in order to facilitate the recovery and bring inflation back to the target.

The Executive Board of Riksbank decided to hold the repo rate at 0%. The rate is projected to remain at this level in the years to come. The board also kept the envelope of the asset purchase programme unchanged at SEK 700 billion.