Europe open: Stocks little changed before UK and US economic data

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– UK retail sales to be released
– US confidence, factory output, housing starts out
– Shell issues profit warning

FTSE 100: 0.03%
DAX: 0.24%
CAC 40: 0.16%
FTSE MIB: 0.09%
IBEX 35: -0.11%
Stoxx 600: 0.09%

European stocks were little changed ahead of the release of reports on UK retail sales and US confidence, industrial output and housing starts.

Kicking off the session, data on UK retail sales is expected to show a rise of 2.5% year-on-year in December, compared to the previous month’s 2.3% jump.

The data comes amid a tough Christmas for UK retailers despite heavy discounting and promotions to attract shoppers who remained cautious.

Retailers have shown mixed results over the festive period as household incomes have failed to keep up pace with rising inflation.

In the US later on, the University of Michigan’s flash reading on consumer sentiment for January is likely to rise to 83.5 from 82.5 in December, according to the consensus forecast.

The Commerce Department will release a report on housing starts which is anticipated to reveal a 9.3% fall to a 990,000 annualised pace in December from a 1.09m rate a month earlier.

Separately, economists predict industrial production in the world’s biggest economy expanded 0.3% last month, compared to a 1.1% gain in November.

The Federal Reserve has been monitoring economic data closely in weighing up whether to announce another round of monetary stimulus tapering at its policy meeting at the end of this month.

In December the central bank decided to start winding back monthly bond purchases by $10bn to $75bn.

Shell slumps on profit warns

Royal Dutch Shell’s shares declined after the oil producer warned that fourth-quarter profits will be ‘significantly lower’ than recent levels due to tough market conditions in downstream, higher exploration expenses and lower upstream volumes.

Accor rallied after Europe’s largest hotel operator said it expects profit to reach the upper end of its forecast in 2013.

Essilor International tumbled after lowering its forecast sales growth for 2013.

The euro fell 0.12% to $1.3603.

Brent crude futures rose $0.170 to 105.930 per barrel, according to data from the ICE.


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