Europe close: Stocks mixed as Germany enters deflation
European stocks were mixed after reports showed Germany entered deflation and unemployment fell less than expected in the nation.
German consumer prices dropped 0.3% in January, more than the 0.1% fall that was expected and compared to the prior month’s 0.2% gain.
It comes day ahead of Eurostat figures which are forecast to show Eurozone consumer prices fell 0.5% year-on-year in January after falling 0.2% a month earlier.
German unemployment fell 9,000 in January, less than the 10,000 drop that was predicted. The jobless rate fell from 6.6% to 6.5% in January, as expected.
Another release revealed the Eurozone economic confidence index rose to 101.2 in January from 100.6 in December, missing forecasts for a reading of 101.6.
Meanwhile, Bank of England governor Mark Carney criticised the current structure of the Eurozone, saying that sharing a currency without also sharing decisions on taxes and spending did not work.
The euro rose 0.12% to $1.1300.
US data
Jobless claims dropped to just 265,000 in the week ended 24 January, the lowest since April 2000. Analysts had expected claims to fall to 296,000 from 307,000 the previous week. The 43,000 decline was the biggest plunge since November 2012.
Pending home sales slipped 3.7% in December, which the National Association of Realtors (NAR) attributed to fewer homes available for sale and a slight rise in prices. However, the year-on-year gain was 11.7%, the highest since June 2013.
The data comes after the Federal Reserve remained steadfast in their claim that the American economy will continue improving alongside strong job gains, despite low inflation and the strengthening dollar. Policymakers said they would remain "patient" over the timing of the first rate hike.
Energy stocks fall
Royal Dutch Shell slumped as it said it will cut spending after reporting worse-than-forecast fourth-quarter profit.
Vallourec SA edged lower after saying it will write down the value of assets by as much as €1.2bn.
Repsol SA dropped after ending its buyback programme.
Oil prices have fallen by almost 60% since June due in part to the boom in US shale production.
Brent crude rose 0.26% to $48.60 per barrel at close of trading, according to the ICE.
Diageo was higher after first-half profit climbed more than forecast.
Raiffeisen Bank International AG gained after the Eastern European bank said it will shrink by at least 20% to boost capital ratios.
Nokia Oyj slipped after saying that profitability is likely to fall this quarter.
Deutsche Bank AG advanced as Germany’s largest bank swung to a fourth-quarter profit, reflecting a decline in provisions for fines and legal settlements.