European Stocks Are Up In Positive Territory On Soft Eurozone Inflation Data

After a slightly positive start and a subsequent fall to lower levels, European stocks are moving higher on Thursday, with investors cheering the data showing bigger than expected drop in Eurozone inflation rate for the month of November.

Optimism the Fed will start reducing interest rates sooner than earlier forecast continues to aid sentiment.

The pan European Stoxx 600 is gaining 0.44%. The U.K.’s FTSE 100 is climbing 0.54%, Germany’s DAX is rising 0.4% and France’s CAC 40 is up 0.43%, while Switzerland’s SMI is advancing 0.36%.

In the UK market, BP, Ds Smith and Smurfit Kappa Group are gaining 2.3 to 2.5%. Royal Dutch Shell, Carnival, Rolls-Royce Holdings, Whitbread, EasyJet, Standard Chartered, Imperial Brands, GSK and JD Sports Fashion are up 1 to 2%.

Severn Trent is down by about 3%. Johnson Matthey is declining 2.7%, while Pennon and United Utilities are down 1.3% and 1%, respectively.

In the German market, Deutsche Bank is gaining 2%. Henkel and Fresenius are up 1.6% and 1.5%, respectively. Bayer, Puma, SAP, RWE, Brenntag and Zalando are also notably higher.

Continental, Sartorius, MTU Aero Engines, Volkswagen, BASF and Merck are down 0.5 to 1.2%.

In Paris, Unibail Rodamco, TotalEnergies and STMicroElectronics are climbing 1.6 to 1.7%. Credit Agricole, Societe Generale and BNP Paribas are gaining 1 to 1.4%.

Alstom is declining 2.6%. Hermes International, Teleperformance and Thales are lower by 1 to 1.25%.

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.