European Stocks Close Higher After Tamer-than-expected U.S. Inflation Data

European stocks closed higher on Thursday with investors reacting positively to the latest batch of earnings announcements, and data showing cooler than expected U.S. inflation reading for the month of July.

The tamer-than-expected U.S. inflation and data showing an increase in weekly jobless claims have added to hopes that the Federal Reserve will leave interest rates unchanged at the September meeting.

Data from the Labor Department showed the annual rate of growth by consumer prices in the U.S. accelerated to 3.2% in July from 3% in June, while economists had expected the pace of price growth to accelerate to 3.3%.

The Labor Department also said its consumer price index rose by 0.2% on a monthly basis in July, matching the uptick seen in June as well as expectations. Excluding food and energy prices, core consumer prices also rose by 0.2% for the second straight month in July, in line with estimates.

Meanwhile, the annual rate of growth by core consumer prices slowed to 4.7% in July from 4.8% in June. The rate of growth was expected to be unchanged.

The pan European Stoxx 600 climbed 0.79%. The U.K.’s FTSE 100 gained 0.41%, Germany’s DAX jumped -0.91% and France’s CAC 40 surged 1.52%, while Switzerland’s SMI ended higher by 0.62%.

Among other markets in Europe, Belgium, Finland, Netherlands, Poland, Portugal, Russia, Spain and Sweden ended higher.

Austria, Denmark, Greece, Iceland, Ireland and Turkiye closed weak, while Czech Republic and Norway ended flat.

In the UK market, Burberry Group, Hiscox, Croda International, Flutter Entertainment, Haleon, Prudential, Severn Trent and Diageo gained 2 to 2.8%.

Persimmon gained more than 2% after it forecast annual profit in line with expectations.

CRH, Experian, RightMove, IHG, Entain, United Utilities, JD Sports Fashion, Anglo American and Schrodders advanced 1.5 to 2%.

Rio Tinto dropped 3.3%. Spirax-Sarco Engineering ended lower by 2.35%. Fresnillo, Antofagasta, Natwest Group, Ashtead Group, HSBC Holdings, Rolls-Royce Holdings and Barclays lost 0.6 to 1.8%.

In the German market, Allianz climbed nearly 5% after it posted a better-than-expected 18% rise in second-quarter net profit.

Fresenius, Hannover Rueck and Sartorius gained 4 to 4.2%.

Vonovia surged 3.25%. Adidas, Puma, Munich RE, SAP, Symrise, Zalando, Deutsche Post, Merck, BASF, Beiersdorf, E.ON, Deutsche Bank and Bayer gained 1.3 to 3%.

Siemens tumbled 4.8% after missing profit forecasts in its latest quarter.

Siemens Energy drifted down 3.1%, while Qiagen and RWE lost 1.7% and 1.1%, respectively.

In Paris, LVMH, Hermes International, L’Oreal and BNP Paribas gained 3 to 3.5%.

Kering, Unibail Rodamco, Pernod Ricard, Edenred, Veolia, AXA, Air Liquide, Essilor, Renault, Eurofins Scientific and TotalEnergies moved up 1.3 to 2%.

In the Swiss market, Zurich Insurance gained after delivering strong results in the first six months of the year.

In European economic news, consumer price inflation in the Czech Republic eased for the sixth month in a row to its lowest levels since December 2021, preliminary figures from the Statistical Office showed.

Final data from the statistical office ISTAT showed Italy’s consumer price inflation hit the lowest in 19 months in July, easing to 5.9% in the month from 6.4% in June.

Statistics Norway said today that Norway’s consumer price inflation slowed more than expected to 5.4% in July from 6.4% in June, reaching the lowest since early 2022.

Denmark’s consumer price inflation accelerated in July for the first time since October last year.