By Shashwat Chauhan and Jesus Calero
(Reuters) -European shares were flat on Thursday as investors avoided large bets ahead of crucial global economic data and the first round of French elections, while H&M (ST:) sank after missing quarterly profit forecasts.
The pan-European held steady at 515.11 points as of 0815 GMT, after ending lower in the last two sessions.
Retail stocks slid 1.8% as H&M, the world’s second-biggest fashion retailer, plunged 12% after missing quarterly earnings forecasts and predicted a drop in June sales.
“H&M repeats the goal of an operating margin of over 10% for 2024 and beyond. However, management warns that the conditions for achieving the goal this year have become more challenging,” said Magnus Raman, an analyst at Kepler Cheuvreux.
Basic resources slipped 0.6%, led by a 2% drop in miner Anglo American (JO:) after Berenberg cut the stock’s rating to “sell” from “hold”, citing concerns over the company’s new strategic plans.
Healthcare stocks lost 0.4%, pulled down by a 4.4% decline in GSK, the biggest loser on the benchmark by percentage, a day after the U.S. CDC narrowed its usage recommendation for all respiratory syncytial virus (RSV) vaccines and held off on recommending their use for people under 60.
On the bright side, Britain’s Serco Group (LON:) jumped 6.8% after the outsourcing company raised its annual profit forecast.
Kering (EPA:) added 5.2% after BofA Global Research upgraded the French luxury goods company to “buy” from “underperform.”
Heavyweight energy stocks added 0.5%, tracking elevated prices. [O/R]
All eyes are now on a key U.S. inflation reading on Friday, which could play a key role in gauging the Federal Reserve’s rate outlook.
Consumer price data from France, Spain and Italy are also due this week.
Government bond yields across the euro zone edged higher on the day in lead-up to the data, with the yield on the 10-year bund last at 2.477%, touching a two-week high. [GVD/EUR]
The first round of French parliamentary elections over the weekend will also be on investors’ radar.
Latest polls suggest the far-right National Rally (RN) is seen reaching 36% of popular vote, while President Macron’s Centrist Bloc is seen at 21%.
Meanwhile, Sweden’s central bank held its key interest rate at 3.75%, as expected. Swedish stocks were last up 0.1%.
