European Stocks Close Higher On Soft U.S. Inflation Data

(RTTNews) - European stocks closed higher on Wednesday amid easing worries about aggressive monetary tightening by the Federal Reserve after data from the Labor Department showed consumer price inflation in the U.S. slowed more than expected in the month of July.

Despite lingering worries on the geopolitical front, the mood in the markets turned quite positive after the release of the U.S. inflation data.

The data said the consumer price index was unchanged in July after jumping by 1.3% a month earlier. Economists had expected prices to edge up by 0.2%.

The data also said core consumer prices, excluding food and energy prices, rose by 0.3% in July, as against expectations for a 0.5% increase. The annual rate of core consumer price growth was unchanged at 5.9%, while economists had expected an acceleration to 6.1%.

The tamer than expected inflation data has led to speculation that the Federal Reserve will slow the pace of interest rate hikes at its September meeting.

The pan European Stoxx 600 surged 0.89%. The U.K.'s FTSE 100 gained 0.25%, Germany's DAX climbed 1.23%, France's CAC 40 advanced 0.52% and Switzerland's SMI gained 0.2%.

Among other markets in Europe, Austria, Belgium, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Poland, Russia, Spain, Sweden and Turkiye closed higher.

Czech Republic, Norway and Portugal ended weak.

In the UK market, Admiral Group shares soared 12.6% after delivering a solid set of interim results. Aviva climbed 12.3%. The insurer unveiled plans to return more cash to shareholders after posting better-than-expected earnings for the first-half of the year.

Ocado Group, ABRDN, Flutter Entertainment, ICP and RS Group advanced 6 to 7%.

Smurfit Kappa Group, Mondi, Ashtead Group, Howden Joinery, JD Sports Fashion, Kingfisher, Spirax-Sarco Engineering, Smith (DS) and Legal & General Group gained 4 to 5.2%. Aveva Group, Scottish Mortgage, Berkeley Group HOldings and Barratt Developments were among the other major gainers.

Haleon Plc shares tumbled more than 8%. GSK, Centrica, SSE, HSBC Holdings, BT Group and BAE Systemes also ended sharply lower.

In the German market, Zalando surged more than 6%. Puma gained about 5.2%, while HelloFresh, Deutsche Wohnen, Infineon Technologies, Continental, Brenntag, Adidas, Siemens, Vonovia, Symrise and Volkswagen gained 2 to 4.3%.

In Paris, Atos, Faurecia, Unibail Rodamco, Renault, STMicroElectronics, Valeo, Worldline, Air France-KLM, ArcelorMittal, Michelin and Saint Gobain gained 2.5 to 5%.

Sanofi plunged more than 8%. Thales ended lower by about 1.3%.

Danish wind turbine maker Vestas soared 10% after saying it would sell its converters and control panels business to KK Wind Solutions.

Germany consumer price inflation slowed as initially estimated in July but remained at an elevated level, final data from Destatis showed on Wednesday.

Consumer price inflation slowed to 7.5% from 7.6% in June. The rate matched the flash estimate published on July 28. In May, headline inflation hit a record high 7.9%.

Although the rate of inflation was slightly down again, it remained at a high level clearly above 7%.