4:00 PM Frankfurt, Germany - European stock markets searched for direction amid mixed company reports and oil price swings ahead of a key meeting of oil producers. The Bank of England left its main interest rates unchanged at 0.5%. Burberry reported a decline in same-store sales and issued a profit warning for fiscal 2017.
European stock markets searched for direction on Thursday amid mixed company reports and oil price swings ahead of a key meeting of oil producers.
Oil prices remained volatile due to mixed expectations ahead of the meeting this weekend in Doha, Qatar, where major producers are expected to discuss a possible oil production cuts.
However, the International Energy Agency said a possible deal will not significantly impact the global supply-demand balance, or the oil markets, which have already started to rebalance.
After sharply falling in the morning, oil prices recovered and traded little changed in the afternoon. Brent crude oil futures inched up 0.1% to $44.24 per barrel and WTI crude oil futures added 0.02% to $41.77 per barrel.
Among oil-related shares, Norwegian Subsea 7 fell 1.2% and BP lost 1.5%. However, Seadrill, Royal Dutch Shell, Total, and Statoil recovered in afternoon trading.
Inflation in the euro zone was zero percent in March, Eurostat said, revising an earlier estimate of 0.1% decline. The reading represents an improvement over a drop of 0.2% in February.
The data fueled hopes that the efforts of the European Central Bank to boost the inflation are giving results. The ECB has targeted inflation of nearly 2% in the next two years and the central bank estimated inflation of 0.1% in 2016, 1.3% in 2017, and 1.6% in 2018.
The increase in consumer prices was largest in restaurants and bars, package holidays and rent, Eurostat said. Energy prices, however, fell 8.7% in March, and dragged the index down. Core inflation, which excludes food and energy prices, increased to 1% from 0.8% in February.
The U.K. stock market underperformed after the Bank of England decided to leave its main interest rates unchanged at the record low of 0.5%, set in March 2009.
The central bank made no changes to its £375-billion asset purchase program, but said the uncertainty related to U.K.’s membership in the EU could damage the economy.
“There are signs that the uncertainty relating to the EU referendum has begun to weigh on certain areas of activity, as some decisions, including on capital expenditure and commercial property transactions, are being postponed pending the outcome of the vote,” the minutes of the bank said.
In London, the FTSE 100 index was almost flat at 6,362.89, while in Frankfurt, the DAX index gained 57.43, or 0.57%, to 10,083.53.
In Paris, the CAC 40 index rose 15.95, or 0.36%, to 4,506.26.
Burberry Group Plc
tumbled 3.5% to 1,298 pence after the luxury-goods retailer reported a decline in same-store sales in the second-half of fiscal 2016 and issued a profit warning for fiscal 2017.
Comparable sales fell 2% for the six months ended March 31 and the decline accelerated in the fourth-quarter.
For fiscal 2017, the company warned that adjusted pre-tax profit would be close to the bottom end of current expectations.
Earlier this week, LVMH Moët Hennessy Louis Vuitton said sales were still negatively affected by the November terrorist attack in Paris.
rose 2% to 72.60 Swiss francs after the food processor reported better-than-expected sales for the first three months of 2016.
Sales increased to 20.93 billion Swiss francs from 20.92 billion francs a year earlier. Organic sales, however, which exclude the effect of currency movements and acquisitions, rose 3.9% in the three months ended March 31.