European stock markets managed to push higher on Wednesday, staging a minor relief rally amid a slew of recent earnings updates.
“The FTSE 100 remains a relative beacon of light. The composition of the index continues to attract investment interest, underpinned by an average dividend yield of over 3% which adds to the total return,” Richard Hunter, head of markets at Interactive Investor, said.
“Despite the premier index having outperformed many of its global peers, the UK as a whole is still seen as providing value, as evidenced by any number of approaches for UK companies from foreign buyers this year.”
It came as German factory gate prices jumped 30.9% in the year to March, the biggest increase since records started in 1949, according to the Federal Statistics Office.
Meanwhile, the war in Ukraine, a global shortage of semiconductor chips and other supply chain woes sent European car sales into decline in March, according to figures released by the European Automobile Manufacturers Association.
It revealed that registrations slumped by 19% during the month, dragging the overall rate of decline down to -11% for the first quarter.
"Hopes that 2022 would be an improvement on 2021 look premature and manufacturers seem increasingly resigned to chip shortages impacting their output well into 2023," Steve Clayton, HL Select fund manager, said.
It came after Netflix (NLFX) revealed last night that it lost 200,000 subscribers in the first three months of the year – its first decline in more than a decade amid intensifying competition and widespread cost increases.
The streaming platform also projected another loss of 2 million subscribers in the three months to the end of June, while its withdrawal from Russia also led to the loss of 700,000 customers.
“The large number of households sharing accounts, combined with competition, is creating revenue growth headwinds. The big COVID boost to streaming obscured the picture until recently,” it said.
Shares were trading 36% lower in New York.
Meanwhile, Asian markets were mixed on Wednesday, with the Nikkei (^N225) climbing 0.9% in Japan, buoyed by a cheaper yen, while other key markets lagged.
“This yen weakness is likely to deliver a huge inflationary impulse into the Japanese economy in the coming months, with the risk that the Bank of Japan is underestimating the wave that is coming its way,” Michael Hewson of CMC Markets said.
“Japanese CPI is currently at a lowly 0.9%, and has only ever been above the Bank of Japan’s 2% inflation target for a brief 11 month period between April 2014 and March 2015, when it peaked at 3.7%, in the last 14 years.”
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