Europe open: Stocks tick lower amid earnings as investors eye Yellen

European stocks ticked lower in early trade as investors sifted through corporate releases and looked ahead to a speech by Federal Reserve Chair Janet Yellen .

At 0855 GMT, the benchmark Stoxx Europe 600 index, Germany’s DAX and France’s CAC 40 were all down 0.1%.

Meanwhile, oil prices were a little firmer, with West Texas Intermediate and Brent crude up 0.5% to $53.18 a barrel and $55.91, respectively.

David Morrison, senior market strategist at SpreadCo, said: “The focus now turns to Fed Chair Janet Yellen and her testimony before the Senate Banking Committee in Washington later today. Investors will be listening out for any clues as regards the timing of rate hikes for the rest of this year. Back in December members of the FOMC produced its quarterly Summary of Economic Projections. In this the consensus coalesced around a forecast of 75 basis-points worth of tightening in 2017. This suggests three 25 basis point hikes.

“Now, Dr Yellen may want to prepare the markets for the possibility of a hike next month. This would give her the flexibility to make four hikes this year, or avoid suggesting that the Fed would make three in a row. But earlier this month data showed that wage pressure inflation was tepid and that persuaded many investors that the Fed may not be in any great hurry to raise rates this year. On top of this the CME FedWatch Tool shows investors assign just a 13% probability of a March hike.”

In corporate news, aerospace and defence group Rolls-Royce fell after it posted a record annual loss of £4.6bn following a £671m corruption fine and amid the collapse of the pound.

HeildelbergCement was also on the back foot despite saying earnings and sales rose sharply in the fourth quarter.

On the upside, TUI AG advanced as it reported a narrower loss for the first quarter.

Credit Suisse gained ground despite reporting a bigger-than-expected loss for the fourth quarter following its settlement with US authorities, as it announced plans to cut 5,500 jobs.

Frozen baked goods maker Aryzta surged after announcing a management shake-up and potential asset sales.

Earlier, data from China showed prices grew at their fastest pace in January in more than two years, underpinned by rising energy prices and Lunar New Year demand for food.

China's consumer price index was up 2.5% from the previous year, compared with a 2.1% jump in December, according to the National Bureau of Statistics.

Meanwhile, the producer price index hit a fresh five-year high last month, up 6.9% year-on-year and beating expectations, compared with a 5.5% rise in December.

The German economy grew less than expected in the fourth quarter, according to data released by Destatis on Tuesday.

Gross domestic product rose 0.4% on the previous quarter on a seasonally-adjusted basis, missing economists’ expectations of 0.5% growth.

Growth was driven by a pickup in domestic demand, as government spending rose significantly from the third quarter, while construction investments were also strong.

For 2016 as a whole, the growth rate was confirmed at 1.9%, marking the strongest rate in half a decade.

Still to come on the data front, eurozone fourth-quarter GDP, industrial production figures and the ZEW survey are at 1000 GMT.