European shares move lower as EU inflation slows, US-China trade talks begin

European shares are lower Thursday as inflationary expectations in the EU and US weigh while investors also sift through company earnings reports.

European shares move lower as EU inflation slows, US-China trade talks begin

European shares are in the red Thursday as investors digest inflation data from the EU, comments from the US Fed and a raft of earnings releases. Overall the combination of lower than expected inflation figures and a mixed morning of earnings saw investors proceed with caution.

By 1330 BST, the EUROSTOXX 600 was 0.39% lower, while the EUROSTOXX 50 was off 0.42%. Regional bourses were also in the red. The German DAX was down 0.44%, the French CAC was 0.33% in negative territory, while the Spanish IBEX moved 0.35% lower.

Inflation watching

After reporting a slowdown in economic growth Wednesday, Eurostat said Thursday that inflation across the euro zone slowed to 1.2%, a lower number than had been expected.

That slowdown in EU consumer price growth means the ECB could be slower than previously anticipated to withdraw the current level of stimulus and wind down its asset purchase program.

Inflation was also a key topic for the US Federal Reserve. The central bank kept rates on hold as expected. However, the future path of US rates was less clear as the bank said it would look-through any high inflation readings. At the same time, its growth outlook wasn’t too strong.

A little uncertainty is also likely creeping in among investors as the US and China meet in Beijing discuss trade between the two countries.

Company earnings related stock moves

Amid that backdrop, there were a number of earnings releases earlier Thursday. The announcements varied although overall, stocks have moved collectively lower.

Among the notable fallers were German property company Vonovia. Shares slid despite increasing its outlook for 2018 and as it made a successful bid for Swedish real estate company, Victoria Park. Vonovia shares fell 1.91% to €41.10.

Volkswagen shares are also lower Thursday after CEO Dr. Deiss shared more details of the company’s planned transformation. While work is ongoing over updating the company culture, plans are yet to be confirmed over the future of non-core assets, including Ducati and Renk.

Volkswagen shares slid 0.30% to €177.30.

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