European Stocks Close Higher On Encouraging European, US Economic Data

European stocks closed broadly higher on Wednesday after data showing less than expected rise in U.S. consumer prices in the month of April helped ease concerns about the outlook for interest rates.

Investors also reacted positively to the latest batch of European economic data.

Data from the Labor Department showed consumer prices in the U.S. rose by slightly less than expected in the month of April, increasing by 0.3%, after rising by 0.4% in March. Economists had expected consumer prices to climb by another 0.4%.

The report also said the annual rate of consumer price growth slowed to 3.4% in April from 3.5% in March, in line with expectations. The annual rate of core consumer price growth decelerated to 3.6% in April from 3.8% in March. The slowdown also matched estimates.

The pan European Stoxx 600 climbed 0.59%. The U.K.’s FTSE 100, which rose to a fresh record high, gaining 0.21%. Germany’s DAX ended 0.82% up, and France’s CAC 40 gained 0.17%, while Switzerland’s SMI settled nearly 1% up.

Among other markets in Europe,

In the UK market, Experian soared more than 8% after it forecast annual organic revenue growth of between 6% and 8% for fiscal year 2025.

Imperial Brands, Segro, Persimmon, Flutter Entertainment and Spirax-Sarco Engineering gained 4.2 to 5.75%.

Vodafone Group gained nearly 4% after launching a €500 million share buyback program.

DCC, Centrica, Fresnillo, Barratt Developments, JD Sports Fashion, Taylor Wimpey, Legal & General, Unite Group, Coca-Cola Holdings, Smurfit Kappa Group, Land Securities, Phoenix Group Holdings and Ashtead Group gained 2 to 4%.

Engineering group Hunting soared 21% on news of a new order win worth $145 million from the Kuwait Oil Company.

Burberry Group ended more than 7% down. Compass Group, B&M European Value Retail, St. James’s Place, Barclays Group and Ocado Group lost 1.7 to 3%.

In the German market, Vonovia and Siemens Energy both gained more than 6%. Commerzbank gained about 5% after reporting its best quarterly profit in more than 10 years and upgrading outlook for lending income this year.

Merck rallied 4.8% after Q1 adjusted profit fell less than expected. Fresenius Medical Care, Adidas, Infineon, RWE, E.ON, Zalando, Siemens, Qiagen and Sartorius also ended with strong gains.

Porsche, Daimler Truck Holding, Hannover Rueck, Rheinmetall and BMW ended lower by 0.8 to 1.6%.

In the French market, Teleperformance, Eurofins Scientific, Veolia and Unibail Rodamco gained 2.4 to 3.5%.

Saint Gobain, Safran, STMicroElectronics, Schneider Electric, Essilor, Accord and Legrand also posted impressive gains.

Carrefour dropped more than 4%. TotalEnergies, Sanofi and ArcelorMittal lost 1 to 1.25%.

ABN AMRO Bank shares slumped 6%. The Dutch lender reported a weaker capital ratio in the first quarter due to an increase in risk-weighted assets.

Finland’s Neste plunged more than 14%. The biofuels maker lowered its 2024 margin guidance for renewable products.

On the economic front, the euro area economy recovered as estimated in the first quarter after contracting for two straight quarters, flash estimate from Eurostat showed.

Gross domestic product grew 0.3% sequentially, reversing the 0.1% falls each in the third and fourth quarters of 2023. The rate matched the preliminary flash estimates released on April 30.

On a yearly basis, economic growth improved to 0.4% from 0.1%. The annual figures also came in line with the previous estimate.

Eurozone industrial production unexpectedly expanded in March driven by the capital goods output, data from Eurostat revealed.

Industrial production posted a monthly growth of 0.6%, confounding expectations for a decline of 0.3%. Production had increased 1% in February.

In the latest Spring economic forecast, released Wednesday, the European Commission said the single currency bloc will grow 0.8% this year, same as the Winter interim forecast. For 2025, the growth outlook was revised down to 1.4% from 1.5%.

The European Union is forecast to grow 1% this year and 1.6% in 2025. Almost all member states are forecast to return to growth in 2024.

France’s consumer price inflation eased further to the lowest level in just over two-and-a-half years, as initially estimated in April, the latest data from the statistical office INSEE showed on Wednesday.

The consumer price index, or CPI, posted an annual increase of 2.2% in April, slightly slower than the 2.3% rise in March. That was in line with the flash data published on April 30. The rate was the weakest since September 2021, when the figure was also 2.2%.