By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets dropped on Friday
as investors waited for inflation data for the euro zone, which
will be closely watched for any signs of the threat of
deflation.
The Stoxx Europe 600 index fell 0.1% to 336.99, trimming its
monthly gain to 4.5%.
Shares of Serco Group PLC led the list of gainers, rallying 10%,
after the government-services company appointed Aggreko PLC's
Rupert Soames as chief executive from June 1.
Old Mutual PLC advanced 4.4% after the investment firm lifted
its full-year dividend and said adjusted operating pretax profit
rose last year on a constant currency basis.
On a more downbeat note, shares of Pearson PLC slumped 8.1%
after the publisher said full-year operating profit declined due to
weakness in its U.S. education business.
In Europe, the main event is the release of preliminary
inflation data for February, which could add more pressure on the
European Central Bank to loosen policy at its meeting next week.
Economists worry that the region is heading for deflation that
could hamper its fragile recovery, although ECB President Mario
Draghi stressed late Thursday that the euro area clearly is not in
deflation at the moment.
Consumer prices rose 0.8% in January, but economists fear
inflation could have dropped to 0.6% in February. The data are out
at 10 a.m. in London, or 5 a.m. Eastern Time.
At the same time, unemployment numbers for the currency bloc are
out, expected to come in at 12% for January.
Ahead of the releases, Germany's DAX 30 index rose 0.1% to
9,599.35, and France's CAC 40 index lost 0.1% to 4,390.93. The
U.K.'s FTSE 100 index dropped 0.2% to 6,796.81.
U.S. stock futures pointed to a lower open on Wall Street after
the S&P 500 index (SPX) closed at an all-time high on Thursday.
The optimistic sentiment was spurred by dovish comments from Fed
chief Janet Yellen, who reaffirmed the central bank's accommodative
policy and assured markets that the Fed can make adjustments to
tapering if needed.
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