European stocks experienced a slight retreat on Thursday despite a global rally fueled by U.S. inflation data, as investors grappled with disappointing earnings reports.
As of 03:25 ET (07:25 GMT), Germany’s DAX index was down 0.1%, France’s CAC 40 slipped 0.2%, and the U.K.’s FTSE 100 dropped 0.4%.
The downbeat sentiment in European markets was attributed to lackluster corporate earnings news.
Shares of Siemens fell nearly 2% following a 2% decline in second-quarter profit at its industrial business due to a slowdown in its flagship factory automation division.
Deutsche Telekom saw its stock decline by 0.6% despite maintaining its full-year guidance after reporting higher revenue in the first quarter.
Meanwhile, EasyJet shares plummeted 6% after the budget airline announced a larger-than-expected pretax loss for the first half of the year, despite signs of easing inflationary pressures in the sector.
On a positive note, BT Group shares surged 9% after the telecoms group increased its dividend and achieved its £3 billion cost-cutting program ahead of schedule.
While European markets experienced losses, global markets had seen a rally, spurred by Wall Street’s record highs and gains in Asia. The April U.S. consumer price index came in below expectations, raising hopes for potential interest rate cuts by the Federal Reserve starting in September.
Crude oil prices also rose, building on gains from the previous session following the release of U.S. consumer inflation data and a larger-than-anticipated draw in U.S. inventories. U.S. crude futures were up 0.4% at $78.91 per barrel, while the Brent contract climbed 0.3% to $83.03 per barrel. The soft U.S. CPI release increased expectations of lower interest rates, potentially boosting future global economic activity and oil demand.
Official data revealed a bigger-than-expected 2.5 million barrel decline in U.S. oil inventories for the week ending May 10, raising hopes for improved demand, particularly with the upcoming summer travel season.
In other markets, gold futures dipped 0.1% to $2,393.60 per ounce, while the EUR/USD currency pair traded 0.1% lower at 1.0880.