Europe close: Stocks tread water ahead of US inflation data

(Sharecast News) - European shares were lower on Monday after a weak session in Asia and amid a lack of major corporate or economic data to drive sentiment ahead of US inflation figures due out later in the week. The pan-European Stoxx 600 index dipped 0.35% to 501.49 , with nearly all the major regional bourses a tad lower alongside as investors looked ahead to US inflation data due out on the next day.

"Every wage growth update and every inflation print gives fresh clues as to the timing of those first interest rate cuts that markets expect to come at some point this year," Danni Hewson, head of financial analysis at AJ Bell said.

"After early enthusiasm was somewhat dampened at the start of the year, no investor wants to get ahead of themselves and there have been plenty of knocks to confidence along the way. The nerves are palpable, and it's been no surprise to see some serious treading of water going on today."

In economic news, China recorded its first month of inflation after four months of deflation with the country's consumer price index up 0.7% year on year in February after a 0.8% fall in January (consensus: 0.3%).

Factrory gate prices on the other hand slipped at an annual pace of 2.7% (consensus: -2.5%).

In equity news, shares in Currys fell 5% after private equity predator Elliott pulled from the race to bid for the UK electricals retailer.

BE Semiconductors led the fallers in sympathy with the hit to its Japan rival Renesas, with a decline of more than 10%. Other shares in the sector were also down, including ASML.