European Stocks Close On Strong Note After Inflation Data

European stocks closed on a buoyant note on Wednesday as easing concerns about inflation triggered hectic buying at several counters from across various sectors.

A measure of French inflation unexpectedly slowed in December and the euro area’s final composite PMI saw a slight upward revision versus the preliminary estimate, helping underpin regional sentiment.

Elsewhere, German import price inflation weakened more than expected to the lowest in nearly one-and-a half years in November, Destatis said.

Investors looked ahead to the minutes from the Federal Reserve’s December 13-14 policy meeting, for clues about the central bank’s interest rate outlook.

The pan European Stoxx 600 gained 1.38%, The U.K.’s FTSE gained 0.41%. Germany’s DAX surged 2.18% and France’s CAC 40 climbed 2.3%, while Switzerland’s SMI rose 1.47%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Finland, Netherlands, Poland, Portugal, Spain and Sweden posted sharp to moderate gains.

Greece and Iceland ended marginally higher, while Denmark, Norway, Russia and Turkiye closed weak.

In the UK market, Ocado Group soared more than 9%. Fresnillo climbed 7.3%, while Burberry Group, Prudential, BT Group, B&M European Value Retail, Sainsbury (J), DCC, IAG, JD Sports Fashion and Smith (DS) rallied 4 to 5.6%.

Glencore plunged nearly 7%. BP, Shell, Anglo American Plc, Centrica, SSE and BAE Systems lost 1.4 to 3.7%.

In the German market, Deutsche Bank, Puma, Adidas, Munich RE, Covestro, Fresenius Medical Care, HelloFresh, Merck, Zalando and BASF gained 3.7 to 5.6%.

Volkswagen, E.ON, Infineon Technologies, Continental, Siemens, Allianz, Daimler, Sartorius, Fresenius and BMW advanced 2.5 to 3.4%.

In Paris, Alstom rallied more than 6%. L’Oreal, Renault, Saint Gobain, LVMH, Veolia, Schneider Electric, BNP Paribas, Kering, Hermes International, Societe Generale, Teleperformance, WorldLine, Unibail Rodamco and Orange ended higher by 3 to 5%.

Total Energies, Engie and Thales shed 1.4 to 2%.

In economic news, Germany import price inflation weakened more than expected to the lowest in nearly one-and-a half years in November, easing sharply to 14.5% in the month from 23.5% in October, figures from Destatis showed. Prices were forecast to slow moderately to 18%.

France’s EU harmonized inflation slowed to 6.7% in December from 7.1% in the previous month, provisional data from the statistical office INSEE showed. Inflation was expected to climb to 7.2%.

Similarly, inflation based on the consumer price index, or CPI, eased to 5.9% in December from 6.2% in the previous month. Prices have increased at the slowest pace in three months, while economists had forecast the inflation rate to advance to 6.4%.

Euro area private sector activity shrank at the end of 2022, at the least marked pace since July, on the back of a slower fall in order books and a rebound in business confidence amid slowing inflation, results of the closely watched purchasing managers’ survey suggested Wednesday.

The composite output index rose to 49.3 in December from 47.8 in November, data from S&P Global showed.

Mortgages approved for house purchases decreased more-than-expected to 46,100 from 57,900 in October in the UK, according to a report from the Bank of England. This was the lowest level since June 2020, when approvals totaled 40,500. The expected level was 55,000.