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European stocks and U.S. equity futures in holding pattern, as investors wait for ECB and U.S. inflation

By Barbara Kollmeyer

Airlines climb after U.S. eases some travel restrictions

European stocks and U.S. equity futures traded flat on Wednesday, a day ahead of key consumer prices Stateside, while a sharp rise in Chinese factory prices sent shares of miners lower. Airlines were among the gainers, after easing travel rules from the U.S. and a virus pass approved by EU lawmakers.

The Stoxx Europe 600 index was flat at 453.73, in a week that has seen the index rise about 0.3% so far. The German DAX fell 0.7%, the French CAC 40 was flat, and the FTSE 100 index was down 0.2%.

U.S. stocks opened mixed, with gains for the Nasdaq Composite as markets adopted a wait-and-see mode ahead of Thursday's crucial consumer-price data for May.

A much sharper-than-expected rise in April prices last month temporarily shook up markets. Investors are waiting to see if strong inflation data will prompt the Federal Reserve to pull back on its accommodative monetary stance, which could turn into a headwind for stocks.

While inflation is rising at a far less heated pace in the eurozone, markets will be closely watching Thursday's European Central Bank monetary policy decision (link), particularly to see if the central bank will keep its current pace of bond purchases intact.

Fresh signs of global pricing pressures emerged from China on Wednesday, after factory-gate prices rose in May at their highest pace in nearly 13 years (link), driven by surging global commodity prices. China's consumer inflation remained tame in May, thanks to subdued food prices.

Mining stocks responded to the Chinese data with losses, with shares of heavily weighted Rio Tinto (RIO.LN), Anglo American and Glencore all down by more than 2%.

Travel-related stocks were climbing on a double dose of optimistic news for the sector. The U.S. Centers for Disease Control and Prevention eased travel restrictions for several European countries (link), including France, Spain and Italy, which are now Level 3, which means Americans can travel to those countries but must be fully vaccinated against COVID-19. The U.S. recommends against travel to countries with Level 4 ratings.

As well, EU lawmakers approved a widely awaited vaccine certificate, (link) aimed at saving Europe's travel industry from another damaging vacation season.

Shares of Aéroports de Paris climbed 9%, Air France-KLM and Deutsche Lufthansa rose more than 3%. Shares of International Consolidated Airlines rose 4%, easyJet , and Wizz Air rose more than 2%.

Shares of Spain's Industria de Diseño Textil , which is known as Inditex and owns Zara and other clothing chains, fell 2%. The retailer said it swung to a net profit for the first quarter of the fiscal year, as sales returned to growth.

"While the resilience shown by Inditex should be commended, the retailer isn't out of the woods yet. Operating costs rose, as stores reopened and the group continued its push online and profits are still less than half of pre-pandemic levels," said Laura Hoy, equity analyst at Hargreaves Lansdown, in a note to clients.

Automobile makers were weak in Germany, with shares of German auto maker Daimler down 2%.

Volkswagen shares dropped 1.2%. The company announced that Martin Winterkorn, its former chief executive officer, will pay EUR11.2 million ($13 million) in compensation (link) for what the company said was a failure by him and other former managers to quickly figure out the 2015 diesel engine emission-cheating scandal. His payment is part of an overall EUR288-million settlement.

-Barbara Kollmeyer; 415-439-6400; AskNewswires@dowjones.com

 

(END) Dow Jones Newswires

06-09-21 1040ET

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