European Stocks Stage Dramatic Recovery, Close Notably Higher

(RTTNews) - European stocks plunged sharply Thursday afternoon after data showing a bigger than expected increase in U.S. consumer price inflation raised concerns about more aggressive rate hikes by the Fed, but rebounded swiftly and ended the session with strong gains.

Traders indulged in some hectic buying at scores of counters in the final hour amid hopes inflation may have peaked.

The data from the Labor Department showed consumer prices in the U.S. rose by more than expected in September, raising concerns about the outlook for interest rates. The data said the consumer price index rose by 0.4% in September after inching up by 0.1% in August. Economists had expected consumer prices to edge up by 0.2%.

In European economic news, Germany's consumer price inflation hit a new record in September, as initially estimated, on rising energy and food prices, final data from Destatis showed.

Consumer price inflation accelerated to 10.0 percent in September from 7.9 percent in August. The rate came in line with the flash estimate.

UK house prices continued to gain in September on subdued stock levels but the pace of house price growth eased notably amid rising interest rates and uncertain economic outlook, the Residential Market Survey from the Royal Institution of Chartered Surveyors showed.

Switzerland's producer and import prices rose 5.4% year-on-year in September, data from the Federal Statistical Office showed. This was the weakest rate of increase since January last year, when prices had grown the same 5.4%.

The pan European Stoxx 600 ended with a gain of 0.85%. The U.K.'s FTSE 100 gained 0.35%, Germany's DAX climbed 1.51% and France's CAC 40 advanced 1.04%, while Switzerland's SMI gained 0.28%.

Among other markets in Europe, Austria, Belgium, Finland, Iceland, Ireland, Netherlands, Norway, Portugal, Russia, Spain, Sweden and Turkiye ended higher.

Czech Republic, Denmark, Greece and Poland closed weak.

In the UK market, Ocado Group soared nearly 11%. IAG climbed about 8% and Natwest Group surged 7.7%. Lloyds Banking Group, Legal & General, Melrose Industries, Next, Rolls-Royce Holdings, JD Sports Fashion, Persimmon, Barclays and Barratt Developments gained 5 to 7%.

Fresnillo shed about 4.1%. Halma, Endeavour Mining, Relx, Croda International Group, Reckitt Benckiser, Unilever, Diageo, GSK, AstraZeneca, Rio Tinto and British American Tobacco lost 1.4 to 3.2%.

In the French market, Air France-KLM rallied more than 6.5%. Faurecia, Atos, Safran, Airbus Group, Societe Generale, Valeo, Veolia, Accor, Schneider Electric, Vivendi, BNP Paribas, ArcelorMittal, Michelin and Credit Agricole gained 2 to 6%.

Hermes International, L'Oreal and Pernod Ricard shed more than 2%.

In the German market, Deutsche Bank surged more than 7%. Continental, MTU Aero Engines, RWE, Siemens, Infineon Technologies, E.ON, Covestro, BASF, Zalando and Fresenius Medical Care gained 2 to 5%.

Symrise declined more than 4%. Vonovia and Deutsche Telekom also ended notably lower.