European stocks drifted lower Wednesday after a solid session in Asia that was largely defined by renewed strength in the U.S. dollar.

Britain's FTSE 100 slipped around 0.07%, or 5 points, by 09:30 GMT as a massive 8% decline for shares in Next (NXGPY) pulled U.K. retailers lower across the board. Germany's DAX performance index fell 22 points in the opening 90 minutes of trading while the CAC-40 in Paris edged 2.7 points lower to 4,900. 

The Stoxx 600 Index, the broadest measure of European share price performance, fell 0.12% to 365.26  by 09:30 GMT. 

Next Plc shares fell more than 13% in early London trading after retailer posted weaker-than-expected sales Wednesday and cautioned that the outlook for the year ahead would be "tougher".

Sales for the 54-day period from Nov. 1 until Christmas Eve fell 0.4%, the company said in a statement, while full-year sales were marked at +0.4% from 2015. The company also said it expects to see pre-tax profit for its 2017/2018 financial year of between £680 million and £780 million, a range the sits below the £784 million average of analysts polled by Reuters. Next shares plunged 8% by 09:30 GMT to change hands at 4,381.5, pence each. 

Overnight in Asia, the greenback returned to its winning streak in New Year trading, rising to a near 14-year high of 103.82 against a basket of global currencies before paring gains to around 103.21 as European trading began. The overnight strength, however, put downward pressure on the yen, which fell to 117.98 and helped the Nikkei 225 add 2.5% by the close to take the benchmark to 19,594.16, the highest close since December 2015 and the best start to a trading year in at least four years.

Elsewhere around the region, South Korea's KOSPI added 0.11% to end the session at 2,045 points and Australia's S&P/ASX index added 0.1% to close at 5,736.4 points. The region-wide MSCI Asia ex-Japan index was quoted 0.13% higher at 429.95.

One of the key data releases for the European market Wednesday will come from Eurostat, the region's official statistics office, which publishes its first 'flash' estimate for currency area inflation at 10:00 GMT. Analysts had been expected the reading to accelerate to 1% from a November pace of 0.6%, but much faster-than-expected inflation data from Germany Tuesday, where consumer prices hit a three-year high of 1.7% on a harmonized European basis, could mean a quicker pace of gains for the month of December around the eurozone.

The implications of faster inflation, if it were to remain entrenched in the moribund European economy, would be significant for both the single currency and the region's bond markets, which are currently being supported by €85 billion in monthly purchases from the European Central Bank as it attempts to guide consumer prices closer to its 'just below 2%' target.

What investors - and central bank policymakers - will be looking for is the degree to which oil prices have influenced headline inflation and whether or not core prices, which strip out volatile price components - are also rising. 

Crude prices edged higher in early European trading after falling around 2.5% during U.S. market hours Tuesday, although the strong dollar kept a lid on gains. WTI futures for February delivery were marked about 0.13% higher at $52.40 per barrel while Brent contracts for March delivery, the global benchmark, were trading 0.55% higher at $55.78 per barrel. 

The Dow Jones Industrial Average's march to 20,000 hit another roadblock on the first trading day of the year as crude oil prices reversed course.

The Dow gained 0.60%, jumping 119 points to 19,881 after coming within 60 points of the 20,000 milestone earlier in the session. Late last year, the Dow crept to within 15 points of the psychologically significant level. The S&P 500 was up 0.85% on Tuesday, while the Nasdaq also rose 0.85%.

Early indications from U.S. futures prices suggest a 14 point gain for the Dow at the opening bell Wednesday, with a 1.74 point bump for the S&P 500 and a 4.4 point advance for the Nasdaq. 

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