Europe close: Markets finish as mixed as eurozone inflation data

European stocks painted a mixed picture at end of play on Wednesday, with the euro starting to wobble after mixed eurozone inflation data.

The pan-European Stoxx 600 finished down 0.17% at 395.46 and Germany’s DAX slipped 0.06% to 13,189.48, while the CAC 40 in Paris gained 0.15% to 5,481.93.

In Spain, the IBEX 35 was ahead 0.22% at 10,451.50, while in London the FTSE 100 fell 0.72% to 7,533.55 and the domestically-focussed FTSE 250 lost 0.63% to 20,243.60.

In currencies, the euro gained 0.09% on the dollar to $1.2413, while it gave up earlier gains to lose 0.21% against sterling at £0.8749, although it maintained strength against the yen but slipped against the Swiss franc.

German unemployment beat expectations by improving to 5.4% in January from 5.5%, though this came on the back of consumer price inflation for January dropping sharply to 1.4% from 1.7%.

Italian unemployment was also better than hoped. as it fell to 10.8% in December from 10.9%.

“After big billing, currency markets were left a bit underwhelmed by the State of the Union address," said ETX Capital analyst Neil Wilson earlier, following a speech overnight from President Donald Trump that touched on many issues but was short on policy details.

The most detail came on infrastructure plans where $200bn of federal funds over the next 10 years on roads and transit projects are hoped to encourage at least $1.5trn of further state and private sector spending.

Eurozone consumer price inflation and unemployment data was mixed, with the headline consumer prices falling less than expected but the core number strengthening in line with forecasts.

January's euro area consumer price index grew 1.3% on the same month last year, data from Eurostat, down from 1.4% a month before but stronger than the 1.2% average estimate from economists.

Core CPI, which excludes more volatile prices such as fuel and food, rose 1.0% year-on-year, improving as expected from 0.9% a month earlier.

Unemployment data from Eurostat also showed the eurozone rate remained at 8.7%, in line with estimates.

“The decline in eurozone CPI has helped provide Mario Draghi with further breathing room this morning, with the headline figure falling for the second consecutive month,” said Joshua Mahony, market analyst at IG.

“However, with core CPI rising for the second month, there is a clear tightening between the core and headline readings.

“The fact that we are seeing core inflation rise in the eurozone means that despite the headlines, Mario Draghi will still be aware that without the influence of energy prices, the trend remains one of rising prices."

In corporate news, shares in engineering group Siemens rose 0.81% despite the firm reporting a 14% fall in fourth-quarter industrial profit to €2.21bn, which it put down to continued weak demand faced by its power and gas arm as management poured investment into factory software.

Shares were in the green as the result beat the €2.19bn analyst consensus.

Elsewhere in Germany, semiconductor manufacturer Infineon Technologies was down 1.01% as it posted a 27% jump in first-quarter net income but cut its revenue outlook.

Struggling Swedish mobile equipment maker Ericsson slid 9.16% after it posted worse-than-expected quarterly losses - its fifth consecutive quarter in the red - saying it expected the Chinese market to continue to decline.

Some positive signs were eyed in a few key markets, such as good momentum in the US from investment in a public safety network and 5G contracts, including Verizon's plans to roll out 5G networks in three to five cities by later this year.

Fourth-quarter results from Dutch bank ING showed net result up €1.02bn from €750m a year before, with the per share basis growing to €0.26 from €0.19.

ING stock ended the day down 1.48% in Amsterdam.