UPDATE 1-European stocks held back by inflation worries

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(For a Businesshala Live blog on the US, UK and European stock markets, click/ or type live/ in a news window)

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* US inflation data raises bets on rate hike

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* Growth in China-sensitive euro areas

* Sika hits record high on MBCC acquisition (adds analyst comment, updates prices)

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Nov 11 (Businesshala) – European stocks were little changed on Thursday after concerns about a US inflation spike, some respite around property developer China Evergrande and reduced corporate earnings.

The pan-European STOXX 600 was flat in morning trading after data on Wednesday showed US consumer prices rose at the fastest pace since 1990, forcing the Federal Reserve to tighten policy sharply. Can do.

“There’s a great deal of concern about extreme growth in U.S. inflation — the 31-year high is nothing to smell for,” said AJ Bell analyst Danny Hewson.

“It’s hard to see that when you consider external influences, especially supply constraints and increased commodity prices, the market thinks this will be the peak of inflation, as the cost of living becomes higher.”

The US data came after data from China, where a surge in coal prices amid power shortages pushed producer prices to a 26-year high.

Euro zone currency markets bet for a rate hike by the European Central Bank, reflecting a higher turnaround in US rate-hike expectations.

However, in support markets, miners as well as China-exposed sectors including construction and materials rose 1.7% and 1.2%, respectively, as troubled developer Evergrande averted a volatile last-minute default for the third time in the past month.

It jumped 8.5% to an all-time high after Swiss chemical company Sika agreed to buy construction chemicals maker MBCC in a $6 billion deal.

Luxembourg-based ArcelorMittal gained 2.7% after reporting its strongest quarter in more than a decade.

In addition, Goldman Sachs raised the 12-month price target for the benchmark STOXX 600 from 520 points to 530 points, saying European earnings chains have proven resilient to supply snags.

Profits of the STOXX 600 companies are expected to jump 60.7% to 104.4 billion euros ($120.7 billion) in the third quarter from a year ago, the latest Refinitiv data showed, a slight improvement from last week’s 57.2% estimate.

European retail property firm Clapierre, Britain’s Shaftesbury and Capital & Counties rose 0.1% to 1.4% after JPMorgan upgraded shares, saying the worst of COVID-19 was “behind us”.

However, overall retail stocks were among the biggest drags, led by British discount retailer B&M, which dropped 6.4% after falling first-half core earnings. (Reporting by Anisha Sarkar in Bengaluru; Editing by Anil D’Silva and Shinjini Ganguly)


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