By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets moved lower on
Friday after better-than-expected euro-zone inflation data eased
pressure on the European Central Bank to cut rates at its meeting
next week.
The Stoxx Europe 600 index fell 0.2% to 336.47, trimming its
monthly gain to 4.3%.
Shares of Serco Group PLC led the list of gainers, rallying
8.7%, after the government-services company appointed Aggreko PLC's
Rupert Soames as chief executive from June 1.
Old Mutual PLC advanced 4.7% after the investment firm lifted
its full-year dividend and said adjusted operating pretax profit
rose last year on a constant currency basis.
On a more downbeat note, shares of Pearson PLC slumped 6.1%
after the publisher said full-year operating profit declined due to
weakness in its U.S. education business.
More broadly, the main event on Friday was the consumer data for
February, surprisingly showing that inflation remained at 0.8%.
Economists worried inflation would drop as low as 0.6%, amid
speculation weak price developments would trigger more easing
action from the European Central Bank at its meeting next week.
After the data, however, analysts said ECB President Mario Draghi
now has more breathing space and is facing less pressure to cut
interest rates.
"The odds are stacked in favor of no further reaction from the
ECB after this inflation number, the most we could get, could be a
little nudge on the forward guidance," said Naeem Aslam, chief
market analyst at Ava Trade, in emailed comments.
Draghi stressed late Thursday that the euro area clearly is not
in deflation at the moment, but that the central bank is ready to
act if needed, according to Reuters.
Additionally, data showed unemployment in the euro zone stayed
at 12% in January.
After the releases, most of the country-specific indexes in
Europe declined as the anticipation for more ECB easing measures
waned. France's CAC 40 index lost 0.3% to 4,383.39 and the U.K.'s
FTSE 100 index dropped 0.1% to 6,801.76. Germany's DAX 30 index
rose 0.1% to 9,593.33.
U.S. stock futures pointed to a lower open on Wall Street after
the S&P 500 index (SPX) closed at an all-time high on Thursday.
The optimistic sentiment was spurred by dovish comments from Fed
chief Janet Yellen, who reaffirmed the central bank's accommodative
policy and assured markets that the Fed can make adjustments to
tapering if needed.
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