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AFP

Business

Stocks mostly fall but Paris hits record high

Paris London Airbus Inflation Stock Market

Wholesale producer prices rose more than expected in the United States, raising concerns about further central bank rate hikes. ©AFP

London (AFP) - The Paris stock market hit an all-time high on Thursday but Wall Street and most European indices fell on renewed concerns about future interest rate hikes.

The Paris CAC 40 index jumped 1.1 percent to a record 7,387.29 points, beating a peak hit last year by just a few points, before paring back gains in afternoon trading.

London's benchmark FTSE 100 index also hit a fresh all-time high at 8,047.06 points, a day after passing 8,000 for the first time.

But it dipped into the red in the afternoon, while Wall Street opened lower.

Traders are tracking economic data for clues into how it might influence the US Federal Reserve, with concern that the central bank could decide to prolong its policy of raising rates to control inflation.

Official data earlier this week showed annual inflation rates easing in Britain and the United States, although they remain around historic-high levels.

But wholesale prices in the United States picked up more than expected in January, bumped by rising costs of goods and petrol prices, according to government data.

The producer price index bounced 0.7 percent in January from December.

"The key takeaway from the report for the market is that headline inflation was hotter than expected on a monthly basis," said Briefing.com market analyst Patrick O'Hare.

"That will stoke worries about inflation pressures persisting at higher levels for longer than expected -- and the Fed keeping rates higher for longer -- even though there was improvement on a year-over-year basis," he said.

While rate increases aim to slow inflation, the higher borrowing costs put a brake on economic activity, raising concerns that they could trigger deep recessions.

Strong US retail sales data on Wednesday had pushed Wall Street higher, but a report on Thursday showed manufacturing activity in the highly industrialised Philadelphia area contracted for a sixth straight month in February.

"Everybody is trying to figure out whether this is going to be a once-in-a-lifetime soft landing or if it's just taking longer before we get a panic recession," said Jerry Braakman, chief investment officer at First American Trust.

Investors are also tracking a raft of corporate results for signs about the health of the global economy.

Net profit at European aircraft manufacturer Airbus soared to a record level in 2022 despite supply chain problems limiting its ability to increase production.

Profit after tax rose one percent to 4.2 billion euros ($4.5 billion) as Airbus delivered 661 aircraft last year, which was lower than planned.

Swiss food giant Nestle -- whose brands include Maggi bouillons, Nespresso capsules and Purina pet food -- and French spirits group Pernod Ricard, owner of Absolut vodka and Jameson whiskey, announced fresh price hikes as they face higher production costs.

But the good times continue for energy firms, with Spain's Repsol joining Shell, ExxonMobil and others in announcing bumper profits for 2022 on the back of soaring oil and gas prices.

Elsewhere, bitcoin extended a march higher, reaching $24,639 -- the highest level since August -- as traders tracked the positive mood across equity markets.