(Sharecast News) - European shares closed mixed on Wednesday as investors weighed a fresh bout of geopolitical tension alongside a dense run of economic data.
Renewed threats from US president Donald Trump to use military force to take control of Greenland, coupled with escalating rhetoric over Venezuela, dampened risk appetite and kept the benchmark Stoxx 600 marginally lower by the close.
The pan-European index slipped 0.05% to 604.96.
Germany's DAX outperformed, rising 0.83% to 25,098.53, while France's CAC 40 edged up 0.06% to 8,242.40.
London lagged regional peers, with the FTSE 100 falling 0.74% to 10,048.21.
Sentiment was hit after Trump said military force was "always an option" in relation to Greenland, prompting a joint statement from leaders of France, Germany, Britain and other European nations, alongside Danish prime minister Mette Frederiksen, rejecting the claims.
Energy markets were again in focus after Trump said the US would take $2bn worth of Venezuelan crude and distribute proceeds between Washington and Latin America, following the weekend's capture of Venezuelan president Nicolas Maduro and further threats of military action against the country's new leadership.
Brent crude futures were last down 0.89% on ICE at $60.16 a barrel, while the NYMEX quote for West Texas Intermediate fell 1.45% to $56.30.
Eurozone inflation slows, construction sector tentatively stable
On the macroeconomic front, eurozone inflation slowed to 2% last month from 2.1% in November, matching forecasts and the European Central Bank's target.
Core inflation eased to 2.3% from 2.4%, reinforcing expectations that eurozone interest rates would remain on hold in 2026 after several cuts last year.
The ECB expected average inflation of 1.9% this year, down from 2.1% in 2025.
The eurozone construction sector meanwhile showed tentative signs of stabilisation in December, with the HCOB construction PMI rising to 47.4 from 45.4, marking the softest contraction since February 2023 despite remaining below the 50 threshold for a 44th straight month.
Germany provided a rare bright spot, with its construction PMI jumping to 50.3 from 45.2, the first expansion since March 2022, led by a surge in civil engineering activity.
France and Italy continued to weigh on the region, while input costs rose at the fastest pace in six months.
Hamburg Commercial Bank chief economist Cyrus de la Rubia said conditions had looked brighter late last year but warned that rising construction costs, high long-term rates and weak order flows could restrain momentum.
German domestic data painted a mixed picture.
Unemployment rose by 3,000 in December, less than the 5,000 increase forecast, leaving the jobless rate unchanged at 6.3%, highlighting continued stagnation in Europe's largest economy.
Retail sales, however, fell 0.6% in November, the steepest drop in five months, driven by a 1.9% slump in food sales, though sales were still 1.1% higher than a year earlier.
In the UK, construction activity remained deeply contractionary despite a modest improvement.
The S&P Global UK construction PMI rose to 40.1 in December from 39.4, still the second-weakest reading since May 2020.
Housing, commercial and civil engineering activity all recorded sharp declines, although business expectations improved, supported by anticipated utilities and infrastructure investment.
S&P Global's Tim Moore said workloads continued to fall, albeit at a slower pace than in November.
US data releases added to a cautious global backdrop.
Mortgage applications rose 0.3% last week as 30-year fixed mortgage rates fell to 6.25%, the lowest since September 2024, while private sector employment increased by 41,000 in December, slightly below expectations.
Factory orders fell 1.3% in October, while the ISM services PMI surprised to the upside at 54.5, its strongest reading in 14 months.
Meanwhile, job openings declined more than expected to 7.1 million in November, reinforcing expectations of a cooling, rather than collapsing, US labour market.
Redcare and InPost in the red, Thales and ThyssenKrupp rise
In equities, Redcare Pharmacy slumped 5.94% after annual results, while InPost fell 5.91%, giving back part of Tuesday's sharp rally linked to takeover speculation.
On the upside, Thales jumped 8.31% after a Samsung security chip powered by its secure operating system won a Best Cybersecurity Innovation award at CES 2026.
Bayer added 0.79% after filing US lawsuits against Pfizer, BioNTech and Moderna over alleged mRNA patent infringement, while ThyssenKrupp surged 6.79% on reports it was considering a phased sale of its steel division to India's Jindal Steel.
Reporting by Josh White for Sharecast.com.
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