Key US inflation print in focus

LONDON — European markets made a late surge on Wednesday after a key US inflation print showed price rises slowing faster than expected.

The pan-European Stoxx 600 jumped 0.9% by mid-afternoon, having hovered around the flatline for much of the trading session. Travel and leisure stocks climbed 2.8% to lead gains as all sectors entered positive territory except health care, which slide 0.5%.

US consumer prices rose 8.5% annually in July, slowing from the previous month in large part due to a drop in oil prices. Economists surveyed by Dow Jones were expecting headline CPI to increase 8.7% on an annual basis and 0.2% monthly.

The easing of inflation will inform the US Federal Reserve’s monetary tightening trajectory ahead of its September meeting.

US stock futures roared higher shortly before the opening bell in the wake of the report, with Wall Street on course for a rebound after the S&P 500 and Nasdaq fell for a third consecutive day during Tuesday’s regular trading hours.

Shares in Asia-Pacific declined on Wednesday, led by more than 2% losses for Hong Kong’s Hang Seng index after Chinese inflation data rose. The producer price index for July rose by 4.2% annually while consumer prices increased by 2.7%, both slightly below analyst expectations.

On the data front in Europe, German final July consumer price inflation came in at 7.5% year-on-year and 0.9% monthly, official figures revealed Wednesday, roughly in line with expectations.

Earnings remain a key driver of individual share price movement in Europe. Ahold Delhaize, ABN AMRO, E.On, TUI Group, Metro, Deliveroo, Prudential and Aviva were among the major companies reporting before the bell on Wednesday.

British insurer Aviva saw its shares jump 12% by mid-afternoon trade after upbeat first-half earnings.

Ahold Delhaize shares gained 8% in early trade after the Dutch retailer reported strong second-quarter earnings and shelved plans to spin off its non-food retailer due to unfavorable market conditions.

Vestas shares jumped 11% after the Danish wind turbine company retained despite its guidance missing second-quarter earnings expectations, and said its price power was improving.

At the bottom of the index, German pharmaceutical company Evotec slide 11% after Morgan Stanley downgraded the stock to “underweight.”

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