(Bloomberg) -- European stocks ticked lower as investors awaited a key US inflation report Thursday for clues about the path of Federal Reserve interest-rate cuts.

The Stoxx Europe 600 slipped less than 0.2% by the close in London. Mining and travel & leisure sectors declined, while real estate and media stocks outperformed. Grifols SA rallied as short-seller Gotham City Research LLC slashed its bet against the blood plasma company.

Among other movers, UK bakery chain Greggs Plc rose after annual revenue beat the average analyst estimate. UK grocer J Sainsbury Plc dropped after a boom in food over the Christmas period was offset by weak sales of clothing and general merchandise. BE Semiconductor Industries NV fell after being downgraded at Deutsche Bank.

Investors are bracing for US consumer price index figures after the start of 2024 saw traders readjusting their expectations for the extent of rate cuts this year. European stocks dropped in the first week of January after a strong fourth-quarter rally and as the market awaits more definitive signals of central bank easing.

The earnings season will also be in focus over the next few weeks, with analysts slashing estimates in the runup to the announcements.

The economic outlook is still gloomy for the first half, pressuring the highly cyclical European market, and the earnings cycle continues to see “significant weakening,” said Leonardo Pellandini, an equity strategist at Bank Julius Baer.

“We expect rate cuts to start toward the latter part of the first half of 2024, as inflation should be under control by then and economic growth welcome again,” he said. “As such, we recommend investors to wait for a better entry opportunity toward the second half of 2024.”

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  • US Stock Futures Little Changed; Aehr Test Systems Falls
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--With assistance from Michael Msika.

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