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European stocks closed on a bright note on Tuesday with investors reacting positively to U.S. consumer price inflation data that raised optimism about the outlook for interest rates.<\/p>\n
Data showing a drop in German inflation, weak U.K. employment and wage growth data spurred hopes of rate cuts by the European Central Bank and the Bank of England.<\/p>\n
Data from the Labor Department showed the U.S. consumer price index climbed by 0.4% in February after rising by 0.3% in January.<\/p>\n
Excluding food and energy prices, core consumer prices also rose by 0.4% in February, matching the increase seen in January. Economists had expected core prices to rise by 0.3%.<\/p>\n
The report also said the annual rate of consumer price growth ticked up to 3.2% in February from 3.1% in January. The
Meanwhile, the annual rate of core consumer price growth slowed to 3.8% in February from 3.9% in January. Economists had expected the pace of growth to decelerate to 3.7%.<\/p>\n
While core price growth slowed by slightly less than expected, the slowdown still seems to have added to optimism about the outlook for interest rates.<\/p>\n
The pan European Stoxx 600 climbed 1%. The U.K.’s FTSE 100 gained 1.02%, Germany’s DAX surged 1.23% and France’s CAC 40 advanced 0.84%, while Switzerland’s SMI ended 0.66% up.<\/p>\n
Among other markets<\/span> in Europe, Austria, Belgium, Denmark, Finland, Greece, Iceland, Netherlands, Norway, Poland, Russia, Spain and Sweden ended with sharp to moderate gains.<\/p>\n Portugal and Turkiye closed weak.<\/p>\n In the UK market, Entain, JD Sports Fashion, Prudential, HSBC Holdings, IHG, Smiths, ICP, Smurfit Kappa Group, Beazley, Rio Tinto, Rolls-Royce Holdings, Marks & Spencer, Weir Holdings, Ocado Group and 3i gained 2 to 4%.<\/p>\n British American Tobacco, Barclays, Associated British Foods, Pearson, Haleon, Natwest Group, Intertek, Compass Group, Melrose Industries and Howden Joinery also ended sharply higher.<\/p>\n Persimmon shares ended down by 3.7% after the company narrowly missed market views for last year’s pretax profit and revenue.<\/p>\n Severn Trent, SSE, National Grid, Centrica, Mondia, United Utilities, Unite Group, Croda International, St. James’s Place and DS Smith ended down 1 to 2%.<\/p>\n In the German market, Porsche gained 4.25% reversing an early slide after the luxury carmaker said it expects lower returns in 2024.<\/p>\n Deutsche Bank, Infineon, Zalando, Volkswagen, BMW, Commerzbank, Merck, HeidelbergCement, Daimler Truck Holding, Puma, Henkel and SAP gained 2 to 5%. <\/p>\n Adidas, Covestro, Brenntag, Allianz, Mercedes-Benz, Siemens and BASF also ended notably higher.<\/p>\n MTU Aero Engies ended more than 2% down. E.ON, Bayer, Symrise and Vonovia also closed weak.<\/p>\n In Paris, Renault rallied 4.5%. Alstom, ArcelorMittal, WorldLine, Legrand, Carrefour, AXA and Stellantis gained 2 to 4%.<\/p>\n Saint Gobain, Societe Generale, Safran, STMicroElectronics, Publicis Groupe, Thales, Eurofins Scientific, Michelin, Kering and BNP Paribas advanced 1 to 2%.<\/p>\n Unibail Rodamco, Veolia, Teleperformance and Orange lost 1 to 2%.<\/p>\n German consumer prices posted its weakest rise since mid-2021, as initially estimated, on weaker energy and food prices in February, final data from Destatis revealed.<\/p>\n The consumer price inflation slowed to 2.5% in February from 2.9% in January. The last time inflation was lower was in June 2021, when it stood at 2.4%.<\/p>\n Excluding energy and food, core inflation was 3.4%, the same as in January and matched flash estimate. This was well above the European Central Bank’s 2% target. On a monthly basis, inflation doubled to 0.4%, in line with estimate, from 0.2%.<\/p>\n Data published by the Office for National Statistics showed the UK unemployment rate increased in January and wage growth slowed.<\/p>\n The ILO jobless rate rose to 3.9% in three months to January from 3.8% in the prior period. The rate was seen unchanged at 3.8%. At the same time, the employment rate came in at 75%.<\/p>\n Average earnings excluding bonus gained 6.1% in three months to January. The rate was forecast to climb 6.2%, the same rate as seen in the preceding period. Including bonus, earnings increased 5.6%, slightly slower than economists’ forecast of 5.7%. <\/p>\n<\/p>\n<\/div>\n