European Stocks Close On Firm Note On Encouraging Regional Economic Data

European stocks closed on a bright note on Wednesday, as investors reacted positively to UK inflation data and a report showing a sharp plunge in German producer prices, and looked ahead to the Federal Reserve’s policy announcement later in the day.

The Bank of England (BoE) is scheduled to announce its monetary policy on Thursday. The Bank of Japan, the Swiss National Bank and the Norges Bank are also set to make their policy announcements this week.

The pan European Stoxx 600 gained 0.91%. The U.K.’s FTSE 100 climbed 0.93%, Germany’s DAX surged 0.75% and France’s CAC 40 ended 0.67% up, while Switzerland’s SMI gained 0.77%.

Among other markets in Europe, Austria, Belgium, Denmark, Finland, Netherlands, Norway, Poland, Portugal, Spain and Sweden closed higher.

Greece, Iceland, Russia and Turkiye ended weak.

In the UK market, housing sector stocks Barratt Developments, Persimmon and Taylor Wimpey rose sharply after data showed British house prices increased by 0.6% in the 12 months to July.

Just Eat Takeaway.com climbed more than 7% after its U.S. unit Grubhub was allowed to sue New York City over a law capping how much it can charge restaurants for delivering meals.

Taylor Wimpey, Persimmon, Barratt Developments, BT, Kingfisher, Croda International, Segro, Land Securities, TUI and Natwest gained 4 to 5.6%.

Lloyds Banking Group, British Land Company, Berkeley Group Holdings, Auto Trader Group, AstraZeneca, Pennon, Johnson Matthey, Rightmove, Easyjet, GSK, Entain and United Utilities also moved up sharply.

Smurfit Kappa Group ended 4% down. WPP, Melrose Industries, Centrica, 3i, BAE Systems, Burberry Group, Pearson and Rolls-Royce Holdings lost 1 to 2%.

In the German market, automakers Mercedes-Benz, BMW and Volkswagen gained after data showed EU car sales grew 21% in August.

Sartorius surged 4.7%. Symrise, Zalando, Siemens Healthineers, Beiersdorf and Fresenius gained 1.8 to 3.7%.

In Paris, Stellantis, Unibail Rodamco, Societe Generale, Edenred, L’Oreal, WorldLine, Essilor, Eurofins Scientific, Sanofi, Hermes International, Dassault Systems, BNP Paribas and Renault gained 1.5 to 3.2%.

Thales, Air Liquide, TotalEnergies, Publicis Groupe, Engie and Carrefour ended with sharp to moderate losses.

Data from the Office for National Statistics showed UK consumer price inflation unexpectedly slowed in August and factory gate prices declined for the second consecutive month.

The consumer price index posted an annual increase of 6.7% in August after rising 6.8% in July. Inflation was expected to rise to 7%. Moreover, this was the weakest inflation since February 2022.

On a monthly basis, the CPI was up 0.3%, in contrast to the 0.4% fall in July. Prices were forecast to rebound 0.7% in August.

Germany’s producer prices declined at a record pace in August mainly due to the base effect caused by the very high price level of the previous year, preliminary data from Destatis showed.

The producer price index, or PPI, fell 12.6% year-over-year in August, much faster than the 6% decline in the prior month, which was the first decline since November 2020.

Eurozone construction output expanded in July, driven by increased building activity, data from Eurostat revealed. Production in the construction sector advanced 0.8% month-on-month in July, reversing a 1.2% fall in June.

The European car market continued to grow sharply in August amid rising demand and market share for battery-powered electric vehicles, data released by the European Automobile Manufacturers’ Association, or ACEA, showed.

New car registrations advanced 21% on a yearly basis in August, following a 15.2% gain in July. Sales volume increased for the thirteenth straight month.