Monday, June 17, 2024

British inflation in August was lower than expected, Germany’s producer price index fell sharply in August, and European stock indexes rose across the board.

On Wednesday (September 20), the European market closed higher as global investors awaited the Federal Reserve’s latest monetary policy decision.

The pan-European Stoxx 600 index closed up 4.14 points, or 0.91%, at 460.66 points;

Germany’s DAX30 index closed up 117.57 points, or 0.75%, at 15782.05 points;

The UK’s FTSE 100 index closed up 72.65 points, or 0.95%, at 7732.85 points;

France’s CAC40 index closed up 48.67 points, or 0.67%, at 7330.79 points;

The European Stoxx 50 Index closed up 34.50 points, or 0.81%, at 4277.20 points;

Spain’s IBEX35 index closed up 124.71 points, or 1.31%, at 9644.71 points;

Italy’s FTSE MIB index closed up 456.37 points, or 1.59%, at 29214.00 points.

Most sectors of the pan-European Stoxx 600 index rose. Auto stocks led gains, rising 2%, while oil and gas stocks fell 0.6%.

Forex

Investors widely expect the Federal Reserve to keep interest rates steady when it announces its latest policy decision on Wednesday. The Fed will release a quarterly update on its forecasts for a number of economic indicators including interest rates, gross domestic product, inflation and unemployment.

In terms of economic data, the British inflation rate in August was lower than expected, at 6.7%, a slight decrease from the previous month. Economists polled by Reuters expected 7%.

BNP Paribas strategists wrote in a note: “Markets and the Bank of England are alarmed by today’s weak inflation data. The Bank of England’s Monetary Policy Committee will continue to closely monitor signs of persistent inflationary pressures and overall economic resilience, including conditions in the labor market. and the behavior of wage growth and service price inflation.”

German producer prices posted their biggest year-on-year fall in August since data began being collected in 1949, fueling hopes that inflation in Europe’s largest economy will ease further.

Euro zone banking stocks rose 2.0%, with UniCredit rising 4.7%. Traders cited “bullish” comments from CEO Andrea Orcel at a conference.

Commerzbank shares rose 1.6% after the German lender’s finance chief said on Tuesday that it expects to earn 8 billion euros ($8.5 billion) in net interest income this year as it benefits from rising interest rates.

Among other stocks, Just Eat Takeaway rose 7.1%. Shares of German insurance company Talanx fell 10.0%.

German food delivery group Delivery Hero confirmed talks to sell part of its Asian business, sending its shares up 7.1%.

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