European Shares Recover From Early Losses

European stocks recovered from an early slide to trade on a flat note Wednesday, as luxury stocks surged after upbeat trading updates from Richemont and Burberry.

A cautious undertone prevailed after U.S. Treasury yields hit fresh two-year highs amid Fed rate hike expectations.

Benchmark German debt yields turned positive for the first time since before the pandemic as markets braced for a coordinated monetary policy tightening globally.

The pan European Stoxx 600 was little changed at 479.68 after losing 1 percent on Tuesday.

The German DAX traded flat, while France’s CAC 40 rose 0.4 percent and the U.K.’s FTSE 100 was marginally higher.

Switzerland’s Richemont jumped 8.3 percent after saying revenue climbed 32 percent at constant currencies in the last quarter.

The world’s second-largest luxury group reported strong demand for jewelry and watches.

France’s LVMH, Kering and Hermes all rose over 3 percent.

British luxury brand Burberry soared 6.3 percent after upgrading its full-year forecasts.

WH Smith jumped nearly 6 percent. The retail company said it expected a resumption in the recovery of its travel markets over the coming months.

Medical technology business Smith+Nephew rose over 1 percent after acquiring cementless unicompartmental knee system developer Engage Surgical for up to $135 million.

Centamin fell 2.6 percent after it reported gold production and costs in line with expectations for 2021.

Leoni AG shares plunged 14 percent. The provider of energy and data management solutions for the automotive industry said that searches were carried out at the company sites, as part of investigations by the German Federal Cartel Office into various cable manufacturers and other industry-related companies.

In economic releases, Germany’s consumer price inflation in 2021 hit its highest level in almost 30 years mainly due to the high monthly inflation rates in the second half of the year, Destatis said earlier today.

Consumer prices increased 3.1 percent in 2021 after rising 0.5 percent in 2020. A higher year-on-year rate of price increase than in 2021 was last measured in 1993, when prices were up 4.5 percent.

In December, consumer price inflation rose to 5.3 percent from 5.2 percent in November. The rate came in line with the preliminary estimate published on January 6.

The pound edged lower against the euro and was broadly flat against the dollar despite U.K. consumer price inflation surging to 5.4 percent in December from 5.1 percent in November.

This was the highest annual inflation rate in the National Statistic data series, which began in January 1997.

Another report from the statistical office showed that U.K. factory gate price inflation slowed marginally in December. Output price inflation decreased to 9.3 percent in December from 9.4 percent in November.

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