European markets pull back as investors await ECB, Bank of England decisions

LONDON — European stocks were lower on Thursday morning, with investors focusing on the outcome of the European Central Bank’s next policy meeting, as inflation data in the euro zone remains a concern

The pan-European Stoxx 600 slipped 0.5% below the flatline in early trade, with tech stocks shedding 1.6% to lead losses while oil and gas stocks added 0.4%

In terms of individual share price movement, British catering giant Compass Group climbed more than 8% in early trade after a strong earnings report, which saw quarterly revenue almost return to pre-pandemic levels

At the bottom of the European blue chip index, Swedish bearing and seal manufacturer SKF fell 4.6% after its fourth-quarter earnings report and announcement of a new strategic framework

Investors are awaiting the latest monetary policy decision from the European Central Bank on Thursday, with the region’s inflation data putting pressure on the central bank to act. Inflation in the euro zone rose to 5.1% in January, despite expectations for a sharp drop to 4.4%

The Bank of England also announces its latest policy decision on Thursday, with markets expecting a second consecutive rate hike for the first time since 2004 as inflation runs at multi-decade highs

European stocks closed higher on Wednesday as traders digested a strong set of corporate results. More earnings are on the horizon on Thursday, with Shell and Roche among the companies reporting.

Shell posted a sharp upswing in full-year profit, with adjusted earnings of $19.29 billion, beating analyst expectations on rebounding commodity prices

In the U.S. on Wednesday, stocks rose for a fourth straight day as Alphabet propelled gains in tech thanks to strong quarterly earnings. Earlier in the day, however, new figures showed private payrolls fell by 301,000 in January, well below a Dow Jones estimate for growth of 200,000

U.S. stock futures fell Wednesday night, as traders pored over the latest batch of corporate earnings, which included disappointing numbers from tech giant Meta Platforms. Asia-Pacific markets traded mixed on Thursday amid some lingering concerns about global growth and ongoing geopolitical tensions

Other earnings in Europe on Thursday came from Infineon, Siemens Healthineers, ING, BT and ABB

On the data front, euro zone growth further slowed in January as the omicron Covid-19 variant and associated containment measures weighed on activity. The euro zone composite PMI (purchasing managers’ index) fell to 52.3 in January from 53.3 in December