AFP/London
Europe’s stock markets retreated yesterday as traders weighed conflicting European data but mainly awaited testimony from US Federal Reserve chief Ben Bernanke.
At close, London’s FTSE 100 index of leading shares was down 0.45% to end at 6,556.35 points.
Frankfurt’s Dax 30 retreated 0.41% to 8,201.05 points and in Paris the Cac 40 fell 0.71% to 3,851.03 points.
In Britain, which is a member of the European Union but not the single-currency eurozone, annual inflation hit a 14-month peak in June, official data showed yesterday.
Consumer Prices Index (CPI) inflation jumped to 2.9% in June from 2.7% in May, driven by rising petrol prices and shallower discounts from clothing and footwear retailers, the Office for National Statistics said in a statement.
That was the highest level since April 2012 but was lower than market expectations for 3%, according to analysts polled by Dow Jones Newswires.
Separately, eurozone inflation rose to 1.6% in June from 1.4% in May, EU data agency Eurostat said yesterday, with the figure for powerhouse Germany jumping from 1.6 to 1.9%.
Meanwhile, investors in Germany, Europe’s biggest economy, turned gloomy this month as disappointing economic data appeared to cast a shadow over the recovery outlook, a new survey found.
The widely watched investor confidence index calculated by the ZEW economic institute fell by 2.2 points to 36.3 points in July, disappointing analysts’ forecasts for an increase to around 40 points this month.
German investors apparently took little cheer from a recent pledge by the European Central Bank to keep eurozone interest rates low for the foreseeable future. They fretted instead about the fallout for exports from the slowing Chinese economy.
Meanwhile, the euro rose to $1.3138 from $1.3064 late in New York on Monday. The dollar fell to ¥99.37 from ¥99.82.
The price of gold grew to $1,291.50 an ounce from $1,284.75 Monday on the London Bullion Market.
US stocks also turned lower yesterday as a strong second-quarter earnings report from Goldman Sachs was offset by a sagging performance from Coca-Cola.
In midday trade, the Dow Jones Industrial Average was off 0.33%, while the tech-rich Nasdaq Composite lost 0.47%.
The focus was soon to turn to Bernanke and his testimony on the US economy and monetary policy due today and tomorrow. Dealers will be hoping for more clues about the future of the Fed’s huge bond-buying scheme.
Bernanke said recently that the US central bank would maintain its growth-oriented policies “for the foreseeable future” but some analysts expect the $85bn-a-month stimulus programme to be wound down from the end of the year.