Retailers and Madrid shine on Inditex, STOXX dips

STOXX Europe 600 down 0.15%

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Inditex beats profit estimates

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U.S. stock futures inch lower

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RETAILERS AND MADRID SHINE ON INDITEX, STOXX DIPS (0751 GMT)

A strong update from Zara-owner Inditex in Spain not only boosted its shares by over 5% but also gave lustre to the broader retail sector and helped Madrid stand out against an otherwise muted picture for the European open.

The region-wide STOXX Europe 600 fell 0.15% and similarly weaker were other country indices. Poor export data from China and slower-than-expected growth for German industrial output didn't help. Madrid's IBEX rose as much as 0.7%.

Chip stock BE Semi, which has rallied on optimism over booming adoption of AI-related semiconductor tech, pulled back, falling 5.6%. The broader tech index dipped 0.1%.

Retailers led gainers, up 2%. Some money flowed back to banks, up 0.3% driven by Danske Bank's strong update and following gains across U.S. peers on Tuesday.

Britain's largest North Sea oil and gas producer Harbour Energy rose by 4% after a Reuters report of merger talks with Mexican peer Talos Energy.

Here's your opening snapshot:

(Danilo Masoni)

EUROPE SIGNALS MUTED START (0643 GMT)

European shares looked set for a directionless start on Wednesday, following poor China export data that highlighted weakness in global demand and as talk grew that investors could look at taking profits out of the strong rally in big U.S. tech stocks.

EuroSTOXX50 futures were up 0.05% and FTSE contracts inched 0.1% lower. DAX futures were up marginally even after data showed German industrial production rose slightly less than expected in April.

Futures on the tech-heavy Nasdaq meanwhile fell 0.1%, trading just below 14-month highs.

In corporate news, Zara brand owner Inditex was in focus after reporting a 16% jump for sales of its spring-summer collection, in a sign the fast-fashion retailer can continue its strong run. One trader called the shares up as much as 2%.

Eyes also on Danske Bank after the Danish lender raised its long-term earnings target -- euro bank futures rose 0.6% -- and Atos after the IT firm forecast sales at loss-making unit Tech Foundations to hit bottom in 2024.

Rheinmetall could find support after Germany ordered another batch of 20 infantry fighting vehicles to supply to Ukraine over the coming months.

(Danilo Masoni)

CHINA DISAPPOINTS AGAIN, FANNING SPECULATION ON STIMULUS (0559 GMT)

China's keenly awaited trade data for May did little to stir markets increasingly inured to weakening momentum in the world's second-largest economy, although it will fuel further speculation of policy stimulus measures from Beijing.

For the record, exports posted a bigger-than-expected drop of 7.5% year-on-year, sending the trade surplus to a 13-month low, while imports remained mired in negative territory.

While the data had little immediate broad impact, the Chinese yuan weakened on cue and Europe could well view the figures in a bleaker light on a day that features few domestic catalysts.

The Reserve Bank of Australia's surprise rate hike and hawkish messaging on Tuesday continue to reverberate, raising speculation that the Bank of Canada might similarly defy poll forecasts by resuming rate hikes later on Wednesday, following recent sticky inflation data.

Indeed, RBA Governor Philip Lowe was still explaining Tuesday's policy decision in a speech to bankers after the central bank wrong-footed economists who predicted there would be a rate pause for a second straight month.

Expectations of a follow-up hike in July cushioned the Aussie from the weak Chinese trade numbers and Australia's own below-forecast first-quarter gross domestic product data.

Stock markets in Asia were mixed, as were U.S. equity futures, following a slightly firmer finish on Wall Street. Light positioning could well persist into next week's lineup of major central bank meetings, as the earnings season draws to a close.

One corner of the market that is seeing volatility is bitcoin, which reversed much of Tuesday's sharp drop on a flight to quality in the crypto space following a widening U.S. crackdown on exchanges and smaller coins.

Key developments that could influence markets on Wednesday:

German April industrial output

ECB's Fabio Panetta, Edouard Fernandez-Bollo and Luis de Guindos speak at conference on financial integration in Brussels

ECB's Klaas Knot briefs Dutch parliament on financial sector stability

OECD updates global economic outlook

U.S. April trade and consumer credit

Bank of Canada policy decision

(Sonali Desai)