European Bourses Ease As Inflation Drop Ignites Worries of Deflation

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European stocks fell after inflation dropped in January, sparking worries of deflation.

Inflation in the euro zone dropped to 0.7% in January from 0.8% in December, falling short of estimates and hitting the lowest level since October. Economists expected a 0.9% rise.

Euro-area unemployment held at 12% in December, slightly better than expectations for 12.1%. November was revised to 12%, down from a record 12.1% in September.

Spain's European Union-harmonized consumer price index rose 0.3% on the year, the same as in December.

The monthly UK consumer confidence index from research firm GfK rose to -7 in January from -13 in December. That was the highest level since September 2007 and more than reversed the single-point declines reported in the index in recent months.

In ADR news, Diageo Plc ( DEO ) is downgraded to neutral from buy at Goldman Sachs, citing continued challenges to growth in emerging markets.

BT Group ( BT ) reported Q3 adjusted earnings before interest, taxes, depreciation and amortization of 1.54 billion pounds ($2.54 billion). The average prediction of analysts surveyed by Bloomberg was for 1.5 billion pounds.

Deutsche Bank ( DB ) is cut to equal weight from overweight at Barclays.

Novo Nordisk ( NVO ) is raised to buy from neutral at Swedbank AB, citing a number of phase-three treatment studies that will help it expand its product offering in the next six to 18 months.

The FTSE-100 was last down 0.43% at 6,510.44, the DAX down 0.71% at 9,306.48 and the CAC-40 down 0.34% at 4,165.72.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Commodities

Referenced Stocks: BT , DB , DEO , NVO

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