European shares fall on jitters ahead of U.S. CPI data (updated)

CTI Biopharma

10/05/2023 09:26

(For a Reuters live blog on U.S., UK and European stock
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        * 
      STOXX 600 off 0.4%
    

        * 
      U.S. CPI data due at 12:30 GMT
    

        * 
      Credit Agricole gains after upbeat Q1 earningsSOBI falls
on
offer to buy CTI BioPharma
    

  
 (Updates prices, adds comments, inflation data estimates in
para 3, details throughout)
    By Amruta Khandekar
       May 10 (Reuters) - European shares fell on Wednesday as
gains in Credit Agricole after the bank's upbeat earnings were
more than offset by market jitters ahead of U.S. inflation data
that is likely to shape expectations for rate cuts in the
world's largest economy.
    The pan-European STOXX 600 index  .STOXX  reversed early
gains and was down 0.4% by 0808 GMT.
    The U.S. inflation data, due at 8:30 am ET (1230 GMT), is
expected to show that headline consumer prices maintained a 5%
year-on-year growth rate in April, while they rose 0.4% on a
monthly basis, compared with a 0.1% gain in March.
    The data will have a significant impact on the odds of the
Federal Reserve cutting rates later in the year, the chances of
which received a setback after a strong U.S. payrolls report
last week.
    While headline CPI in the U.S. has been steadily trending
lower, core inflation remains too stubborn for the Fed's
comfort, Deutsche Bank strategists said in a note.
    Shares of Credit Agricole SA  CAGR.PA  gained 5.3% after
France's second-biggest listed bank beat first-quarter earnings
estimates on a boost from trading revenue.
    European banks  .SX7P  were the top sectoral gainers on the
STOXX 600. They were followed by real estate stocks  .SX86P ,
led by a rebound in Sweden's SBB  SBBb.ST  following steep
declines earlier this week on debt concerns.
    On the flip side, Swedish Orphan Biovitrum (SOBI)  SOBIV.ST 
dropped 15.5% to the bottom of the STOXX 600 after the drug
maker said it had agreed to make a $1.7 billion cash offer to
buy U.S.-based CTI BioPharma  CTIC.O . 
    Siemens Healthineers  SHLG.DE  fell 7.4% as the medical
device maker said it was discontinuing its heart surgery robots
business after its quarterly operating profit fell 30%.
    The declines in those two stocks pushed the healthcare
sector  .SXDP  down 0.5%.
    Meanwhile, data showed German consumer prices, harmonised to
compare with other European Union countries, rose by 7.6% on the
year in April.
    The European economy has held up better than feared but
analysts caution the outlook is not as rosy.
    "While we definitely do not expect a recession in the euro
zone, but from here it would be difficult (for the economy) to
continue to accelerate," said Reinhard Cluse, Chief European
Economist at UBS.
    Cluse said a likely U.S. recession and the effects of
monetary tightening so far were headwinds to euro zone growth.
    Among other movers, Evotec  EVTG.DE  gained 9.3%, after the
German biotech company said on Tuesday its unit entered a
strategic partnership with Sandoz, a unit of Swiss drugmaker
Novartis  NOVN.S .
    Alcon  ALCC.S  jumped 7.4% to the top of the Swiss blue-chip
index  .SSMI  after the company reported better-than-expected
first-quarter earnings.
    Of the 205 companies in the STOXX 600 that have reported
earnings so far, over half have beaten analyst estimates,
according to Refinitiv data.

 (Reporting by Amruta Khandekar; Editing by Sonia Cheema and
Savio D'Souza)
 ((Amruta.Khandekar@thomsonreuters.com;))