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European Equity Benchmarks Close Higher; Euro Area Inflation Declines to 1.4% in January

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The broad-based major European indices closed higher in Friday trading led by mining stocks and industrial companies.

In economic news, the euro area annual inflation rate was 1.4% in January, down from 1.5% in December, and up from 1.3% a year earlier, according to Eurostat, the statistical office of the European Union. European Union annual inflation was 1.5% in January, down from 1.6% in December, and 1.6% a year earlier.

The lowest annual rates were registered in Greece (0.5%), and Croatia and Portugal (both 0.6%), while the highest annual rates were recorded in Romania (3.2%), Latvia (2.9%), Estonia and Hungary (both 2.8%). Compared with December, annual inflation fell in 16 member states, remained stable in five and rose in seven. The highest contribution to the annual euro area inflation rate for the month came from services (+0.70 percentage points, pp), followed by food, alcohol and tobacco (+0.36 pp), energy (+0.26 pp) and non-energy industrial goods (+0.06 pp).

And in Germany, net lending of general government amounted to EUR58 billion in 2018 according to updated results of the Federal Statistical Office (Destatis). In absolute terms, this was the highest surplus achieved by general government since German reunification in 1990. When measured as a percentage of gross domestic product at current prices, the surplus ratio of general government was +1.7%. The data are based on the definitions of the European System of Accounts (ESA) 2010 used to monitor the budget situation in the EU Member States.

Net lending is calculated as the difference between revenue (EUR1.5436 trillion) and expenditure (EUR1.4855 trillion) of general government. Compared with the previous year, revenue increased 4.7%, while expenditure rose 3.2%. Revenue was higher than expenditure at all levels of general government.

In equities, mining stocks helped buoy the FTSE in London as Evraz, Anglo American, and Glencore rose 3.5%, 3.4%, and 2.8% respectively, while BHP Group, Antofagasta, and Rio Tinto climbed 2.2%, 1.8%, and 1.7% respectively. Hikma Pharmaceuticals was up 3.3%, while turnaround firm Melrose Industries, and educational media company Pearson increased 2.4% and 2.2%.

In Frankfurt, internet company Wirecard led the DAX higher, rising 4.8%, followed by industrial companies Thyssenkrupp, and Siemens, which gained 1.7% and 1.5% respectively. Airline operator Lufthansa, and industrial gases company Linde each closed 1.1% higher, while stock market operator Deutsche Boerse, adhesives manufacturer Covestro, and software firm SAP were up 0.9%, 0.8%, and 0.7% respectively.

In Paris, IT firm Atos, and plane maker Airbus Group led the CAC into positive territory, rising 3.3% and 2.1% respectively, followed by aerospace and defense company Safran, which climbed 1.5%. Bank Societe Generale, and software firm Dassault Systemes were up 1.4% each, while semiconductor company STMicroelectronics, and insurance firm AXA each closed 1.2% higher. Steel and mining company ArcelorMittal, and media company Vivendi each gained 1.1%.

The FTSE gained 0.16%, the DAX rose 0.30%, and the CAC-40 increased 0.38%.

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

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

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