European stocks closed on a firm note on Thursday as soft Eurozone inflation data, and rising optimism the Federal Reserve will start reducing interest rates from the first quarter of next year helped underpin sentiment.
The cooler than expected eurozone inflation has raised hopes the European Central Bank will begin cutting rates from early next year.
The pan European Stoxx 600 climbed 0.55%. The U.K.’s FTSE 100 gained 0.41%, Germany’s DAX ended 0.3% up, and France’s CAC ended stronger by 0.59%, while Switzerland’s SMI settled with a gain of 0.48%.
Among other markets in Europe, Austria, Belgium, Denmark, Finland, Greece, Iceland, Netherlands, Norway and Portugal ended higher.
Poland, Russia, Spain, Sweden and Turkiye closed weak.
In the UK market, Smurfit Kappa Group rallied nearly 4.5%. Ds Smith, Standard Chartered, Rolls-Royce Holdings, Carnival, Easyjet, GlaxoSmithKline, Hargreaves Lansdown, Bunzl and Ferguso gained 1.4 to 2.5%.
Severn Trent tumbled 5%. United Utilities and Pennon both ended lower by about 3.7%. Johnson Matthey ended nearly 2.5% down, while TUI dropped around 2%.
Brenntag, up 3%, was the top gainer in Germany’s DAX index. Bayer, Fresenius and Symrise gained 2.2%, 2% and 1.8%, respectively.
Deutsche Bank, Henkel, Fresenius Medical Care, Siemens Energy, Siemens Healthineers and Puma also ended notably higher.
In Paris, WorldLine, Unibail Rodamco, Pernod Ricard, BNP Paribas, Societe Generale, LVMH, Credit Agricole, Stellantis, TotalEnergies, ArcelorMittal and Veolia gained 1 to 2%.
Alstom, Essilor, Thales and Teleperformance ended lower by 0.9 to 1.3%.
On the economic front, data from Eurostat showed the inflation rate in the Euro Area declined to 2.4% year-on-year in November, the lowest level since July 2021, according to preliminary estimate. On a monthly basis, consumer prices fell by 0.5% in November, the largest monthly drop since January 2020.
Data from Destatis showed retail sales in German rose 1.1% month-over-month in October, rebounding from a 0.8% drop in September. The jump was higher than the forecast of a 0.4% increase. Year-on-year, retail sales decreased 0.1% in October.
Meanwhile, the unemployment rate in Germany rose to 5.9% in November, up from October’s 5.8%.
Data from statistical office INSEE showed France’s consumer price inflation slowed to the lowest rate since January 2022, coming in at 3.4% year-on-year in November, down from 4% in the previous month, according to preliminary estimates. On a monthly basis, consumer prices dropped by 0.2% in November.
A separate data from INSEE showed the French economy fell 0.1% on quarter in the third-quarter, following a 0.6% expansion in the previous period. On a yearly basis, the economy rose 0.6%, the weakest expansion in over two years.
Household spending in France declined by 0.9% from a month earlier in October 2023.
Meanwhile, producer prices in the French domestic market was stable from a month earlier in October, following a 0.7% increase in the previous month. Year-on-year, producer prices fell 1.2% in October down from a downwardly revised 1.5% drop in the previous month.
In U.S. economic news, the Commerce Department released a report showing consumer price growth in the U.S. slowed in line with economist estimates in the month of October.
The report said the annual rate of consumer price growth decelerated to 3% in October from 3.4% in September.
Core consumer price growth also slowed in line with estimates, slipping to 3.5% in October from 3.7% in September.
Market Analysis
European Stocks Close On Firm Note On Encouraging Inflation Data
2023-11-30 17:25:17
