European Shares Gain As Eurozone Inflation Dips Below 2%

European stocks eked out modest gains on Tuesday after flash data from Eurostat showed Eurozone inflation eased more than expected in September.

The harmonized index of consumer prices posted an annual increase of 1.8 percent compared to a 2.2 percent rise in August. Economists had forecast inflation to moderate to 1.9 percent.

The euro area inflation rate will stabilize at the ECB’s 2 percent target during the course of 2025, Finnish ECB policymaker Olli Rehn said in a speech earlier today.

Meanwhile, investors shrugged off final estimates from S&P Global and Hamburg Commercial Bank (HCOB) that revealed manufacturing activity across the euro zone declined at its fastest pace this year in September.

A speech by European Central Bank’s Vice President Luis de Guindos along with the U.S. ISM manufacturing PMI and JOLTS job openings data may garner investor attention as the day progresses.

The pan European STOXX 600 was up 0.2 percent at 524 after falling 1 percent on Monday.

The German DAX and the U.K.’s FTSE 100 both rose around 0.3 percent, while France’s CAC 40 slipped 0.2 percent on fears about the sustainability of the country’s finances.

In corporate news, Mulberry Group shares were up 1 percent. The British luxury handbag maker has rejected a conditional bid from Mike Ashley’s Frasers Group, after consulting with its financial and legal advisers and the majority shareholder, Challice Limited.

Energy stocks such as BP Plc and Shell were moving lower as crude oil futures retreated in European trade on demand worries.

Greggs slumped nearly 4 percent after the bakery chain reported a slowdown in underlying sales growth during its most recent quarter.

Shares of iomart Group were down almost 10 percent after the Scottish IT company warned on first half and fiscal 2025 results.

Covestro AG shares jumped nearly 4 percent as Abu Dhabi’s state oil firm ADNOC announced it will buy the German chemicals producer in a 14.7-billion-euro deal ($16.4 billion).

The agreement stipulates that the bidder will make a public takeover offer for all outstanding shares of Covestro at a price of 62.00 euros per share.