European stocks rise as inflation concerns dominate market sentiment; Greggs tumbles 10%

Marks and Spencer’s on Thursday said like-for-like food sales rose 8.9% in the 13 weeks to the end of December, while clothing, home and beauty added 1.9% over the same period.

“This was another good Christmas for M&S,” chief executive Stuart Machin said in a statement. “Sales records were broken across the business, with Food recording its biggest day and Clothing, Home & Beauty online its biggest week, but we’re not complacent — as a growth business it’s our job to break records.”

The external environment however would remain challenging, Machin warned, pointing to cost and economic headwinds, but also noted that there was much in the group’s control.

The results beat a company compiled analyst consensus, Reuters reported. Shares however pulled back, last trading around 7% lower at 11:25 a.m. London time.

— Sophie Kiderlin

Shares in B&M European dropped 13% on Thursday after the retailer lowered the top end of its annual profit forecast as U.K. sales dropped in the company’s third fiscal quarter.

B&M said that like-for-like revenue growth in the U.K. was down 2.8% between Sept. 29, 2024, and Dec. 28, 2024. It noted positive like-for-like growth in December and said that trend had continued into January.

The retailer said it was narrowing its profit growth guidance and was now expecting group adjusted EBITDA to come in between £620 million ($763 million) and £650 million, from a previous estimate of £620 million to £660 million.

Shares in B&M were down 13.97% at 10:22 a.m. London time, trading at their lowest level since November 2022, according to LSEG data.

— Sophie Kiderlin

Shares in British on-the-go food retailer Greggs fell as much as 10% Thursday, dropping to levels last seen in November 2023 according to LSEG data.

The baker on Thursday said sales rose 11.3% to top £2 billion ($2.46 billion) for the first time in 2024, which however was below analyst expectations. Greggs also reported a 2.5% rise in like-for-like sales in the fourth quarter of 2024, citing more muted high street footfall.

At 9:45 a.m. London time, shares were down 9.9%.

— Sophie Kiderlin

Vehicle deliveries from the Volkswagen brand came to around 4.8 million in 2024, 1.4% less than in the previous year, the company said Thursday.

“Around the globe, 2024 was a difficult year with sluggish economic activity, political challenges and intense competition – particularly in China,” Martin Sander, Volkswagen board member for sales, marketing and after sales, said in a statement.

Deliveries in China tumbled by 8.3% year-on-year to 2,198,900, according to data from Volkswagen. In Europe, deliveries pulled back 1.7%, while both South and North America saw growth of 21.1% and 18.4% respectively.

Volkswagen also said that it had delivered 383,100 battery electric vehicles in 2024.

— Sophie Kiderlin

European markets opened lower on Thursday, with the pan-European Stoxx 600 index falling 0.37% shortly after trading began.

Retail and bank stocks led declines, down around 1% and 0.8%, respectively. Financial services and health care were the only sectors to inch higher.

Major regional bourses had a muted start to the day, with the U.K.’s FTSE 100 trading near the flatline while the German DAX fell 0.29% and France’s CAC 40 pulled back by 0.41%.

— Sophie Kiderlin

British baker and on-the-go food retailer Greggs on Thursday reported that like-for-like sales rose 2.5% in the fourth quarter of 2024, which it said was reflective of a “more subdued High Street footfall.”

“Trading performance reflected a well publicised more challenging market backdrop in the second half of 2024,” the company noted in a trading update.

Across the full year 2024, Greggs’ total sales rose above £2 billion ($2.45 billion) for the first time, the company said, climbing 11.3%. That, however, fell short of expectations, with analysts having forecast a 12.2% increase, according to LSEG data.

Looking ahead, the company said higher employment costs are expected to result in further cost inflation in 2025, but suggested it was confident about the progress it could make this year.

— Sophie Kiderlin

German imports pulled back 3.3%, while exports added 2.1% from the previous month in November, the country’s statistics office Destatis said Thursday.

Calendar and seasonally adjusted exports totaled 127.3 billion euros ($131.2 billion), with imports — adjusted for the same factors — amounting to 107.6 billion euros. That put Germany’s foreign trade balance at a 19.7 billion euro surplus.

The U.S. was Germany’s biggest trading partner for exports, while most imports came from China, the statistics office said.

— Sophie Kiderlin

European markets are expected to open in positive territory Thursday.

The U.K.’s FTSE 100 index is expected to open 13 points higher at 8,256, Germany’s DAX up 44 points at 20,361, France’s CAC up 8 points at 7,454 and Italy’s FTSE MIB up 2 points at 35,210, according to data from IG.

Earnings releases include trading statements from M&S, Tesco and Greggs. German trade balance data for November is due to be released Thursday.

— Holly Ellyatt

China’s consumer price inflation in December slipped to 0.1% year on year, data from the National Bureau of Statistics showed Thursday, stoking deflation concerns.

Growth in headline inflation was in line with Reuters estimates, but less than the 0.2% rise in November. Core CPI, which excludes food and energy prices, rose 0.4% year on year compared with 0.3% rise in the previous month, the data showed.

On a month-on-month basis, China’s CPI came in flat, compared with the 0.6% decline in the prior month.

Food prices fell by 0.6% month on month as a result of conducive weather conditions, official statistics showed. The prices of fresh vegetables and fruits fell 2.4% and 1%, respectively. Prices of pork, which makes up a significant portion of the CPI basket, fell 2.1%.

— Lee Ying Shan

Goldman Sachs is cautious on Chinese tech behemoth Tencent Holdings, removing it from its Asia-Pacific “conviction list” of top picks.

The investment bank also removed several other stocks from the list and added others, including one it gives nearly 50% upside.

CNBC Pro subscribers can read more here.

— Amala Balakrishner

MediaTek, the Taiwanese semiconductor company collaborating with Nvidia on its newly announced small AI supercomputer, is expected to see significant financial benefits from the partnership starting in 2026, according to Bernstein.

Nvidia’s desktop supercomputer, priced starting at $3,000, is set to launch in May 2025.

CNBC Pro subscribers can read more here.

— Ganesh Rao

A summary of the Fed’s December meeting showed central bank officials were concerned about how policies from the incoming Trump administration could impact inflation.

“Almost all participants judged that upside risks to the inflation outlook had increased,” the minutes said. “In discussing the outlook for monetary policy, participants indicated that the Committee was at or near the point at which it would be appropriate to slow the pace of policy easing.”

— Fred Imbert