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European Stocks Close Lower On Inflation Concerns

European stocks closed weak on Wednesday, weighed down by concerns over inflation and rising U.S. treasury yields.

U.S. Treasury yields held near their highest in a year as vaccine rollouts and stimulus measures spurred bets of a likely spike in inflation. Cryptocurrencies were in focus as well following bitcoin rising past $51,000 for the first time, extending its move up north.

The pan European Stoxx 600 slid 0.74%. The U.K.'s FTSE 100 ended 0.56% down, Germany's DAX shed 1.1%, France's CAC 40 lost 0.36% and Switzerland's SMI declined 0.9%.

Among other markets in Europe, Belgium, Czech Republic, Finland, Greece, Ireland, Netherlands, Norway, Poland, Russia, Spain and Sweden ended notably lower.

Austria, Denmark, Portugal and Turkey edged down marginally, while Iceland closed higher.

In the UK market, Hargreaves Lansdown ended nearly 7% down and M&G shed about 5%. British American Tobacco lost nearly 4% after saying it expects a continuing impact from the coronavirus pandemic this year.

Polymetal International, Avast, Fresnillo, Taylor Wimpey, IHG, Smurfit Kappa Group, Ocado, Standard Life and CRH lost 2 to 4%.

On the other hand, Antofagasta rallied nearly 5%. Hikma Pharmaceuticals, Rolls-Royce Holdings, National Grid, B&M, Standard Chartered, BT Group, Morrison Supermarkets, AstraZeneca, BP and HSBC Holdings gained 1 to 2.5%.

In France, Kering shares ended more than 7% down after the company suffered a sales slowdown during the key Christmas shopping season.

Technip lost about 6%. Accor, Air France-KLM, WorldLine, Essilor, STMicroElectronics, Michelin, Capgemini, Renault and Vivendi ended lower by 1 to 3%.

Danone, Orange, Total, Safran, Bouygues and LOreal gained 1 to 2%.

In the German market, Beiersdorf shares lost nearly 6% after the company, which makes Nivea, Eucerin and La Prairie products, said that it did not expect a recovery in profitability in 2021.

SAP and Infineon Technologies ended lower by more than 3.5% and 3%, respectively. Continental, HeidelbergCement, Thyssenkrupp, Deutsche Post, Adidas, RWE, Volkswagen, Bayer and Fresenius Medical Care also ended notably lower.

Elsewhere, Dutch supermarkets and eCommerce company Ahold Delhaize N.V. fell sharply after it swung to a net loss in the fourth quarter of 2020.

Swiss food and beverage giant Nestle SA drifted lower after announcing its agreement to sell Nestlé Waters North America to One Rock Capital Partners LLC in partnership with Metropoulos & Co. for $4.3 billion.

In economic releases, U.K. consumer price inflation rose slightly to 0.7% in January from 0.6% in December, data from the Office for National Statistics showed. The rate was forecast to remain stable at 0.6%. Month-on-month, consumer prices dropped 0.2% after rising 0.3% a month ago. Prices were forecast to ease 0.4%.

Data from Eurostat showed Eurozone's construction output dropped for the first time in three months in December, decreasing 3.7% month-on-month, after a 2.3% growth in November. Production in building construction declined 3.8% monthly in December and output in civil engineering fell 3.4%.

On a year-on-year basis, the construction output fell 2.3% in December, following a 0.6% decrease in the prior month.

According to data released by the European Automobile Manufacturers Association/ACEA, new car registrations in Europe dropped to a record low in January, sliding 24% year-on-year, mainly due to the Covid-19 pandemic-related restrictions across the region. New car registrations had dropped by 3.3% in December.

The latest decline was the worst since a 52.3% fall in May, at the peak of the coronavirus pandemic.

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