European Stocks Dip as UK Retailers and Economic Data Take Center Stage

European stock markets edged lower on Thursday, weighed down by mixed economic data and corporate earnings. Germany’s DAX and France’s CAC 40 slipped by 0.2%, while the UK’s FTSE 100 remained flat as trading volumes were subdued due to the U.S. market closure for former President Jimmy Carter’s state funeral. Positive news came from Germany, where industrial production grew by 1.5% in November, surpassing expectations. However, this contrasted with a decline in retail sales and industrial orders in the same period. The European Central Bank’s continued focus on inflation management and potential interest rate cuts added to the cautious sentiment.

In corporate updates, UK retailer Tesco reported strong holiday sales, with a 4.1% increase in like-for-like sales over the festive season. However, its decision to maintain profit guidance for the fiscal year disappointed investors, leading to a 3% drop in its stock. Marks & Spencer saw a steeper decline of 7%, despite reporting robust Christmas sales growth, as it flagged ongoing economic challenges. Oil and gas giant BP revealed plans to boost production from India’s west coast significantly but faced broader market pressures from U.S. inventory builds and falling crude prices.

Oil prices steadied after a sharp drop on Wednesday, driven by a stronger U.S. dollar and larger-than-expected increases in fuel stockpiles. U.S. gasoline inventories rose by 6.3 million barrels, far exceeding forecasts. Both Brent and WTI crude dipped by 0.1% early Thursday, reflecting ongoing market adjustments. Despite the mixed performance across sectors, investors are closely monitoring inflation trends and central bank policies to assess future market directions.