European Markets Recover After Initial Shock Of US Inflation Data

Share this

BRUSSELS/FRANKFURT/PARIS (Alliance News) - The European markets got off to a positive start Wednesday, fueled by solid GDP data from Germany and the Eurozone. However, the markets sold off sharply after the release of the US inflation report.

Consumer prices in the US increased by more than anticipated in the month of January, according to a report released by the Labor Department on Wednesday. The Labor Department said its consumer price index climbed by 0.5% in January after edging up by a revised 0.2% in December.

Economists had expected consumer prices to rise by 0.3% compared to the 0.1% uptick originally reported for the previous month.

Despite the initial drop following the report, the European markets quickly recovered and even took out the highs of the session in the afternoon. Markets on Wall Street opened sharply lower Wednesday, but staged a quick recovery and climbed into positive territory.

The pan-European Stoxx Europe 600 index advanced 1.06%. The Euro Stoxx 50 index of eurozone bluechip stocks increased 0.86%, while the Stoxx Europe 50 index, which includes some major UK companies, added 0.90%.

The DAX of Germany climbed 1.17% and the CAC 40 of France rose 1.10%. The FTSE 100 of the UK gained 0.64% and the SMI of Switzerland finished higher by 1.67%.

In Frankfurt, steelmaker Thyssenkrupp lost 0.69% after its first-quarter profits and revenue came in lower than estimated.

Engineering and industrial services business Bilfinger surged 5.77% after narrowing its Q4 loss.

In Paris, Danon

e rose 0.59%. The company intends to sell part of its 21.3% stake in Japan-listed Yakult Honsha Co.

Cr?dit Agricole fell 2.83%. The bank posted double-digit growth in the fourth quarter despite a one off tax surcharge in France.

In London, Sky jumped 1.98% and BT Group dipped 0.13%. The companies have agreed to pay GBP4.464bn to secure the broadcast rights for the bulk of Premier League football games from the 2019/20 season.

Serco Group advanced 3.77%. The company has signed a revised GBP30 million deal to buy various UK health facilities management contracts from bust services group Carillion.

Galliford Try plunged 18.99% on equity dilution worries after the construction group and homebuilder announced a GBP150m capital raising to help cover the impact of Carillion's liquidation.

Credit Suisse jumped 3.79% in Zurich after its Q4 net loss narrowed from last year.

Retail giant H&M dropped 4.63% in Stockholm after saying 2018 will be challenging.

Euro area continued its expansion at the end of 2017, as previously estimated, taking the full-year growth to a decade-high. Gross domestic product climbed 0.6% sequentially, following third quarter's 0.7% expansion. The rate came in line with the preliminary flash estimate published on January 30.

The German economy grew as expected at the end of 2017, largely driven by foreign demand, while inflation continued to ease in January, data from Destatis revealed Wednesday. Gross domestic product grew 0.6% sequentially in the fourth quarter, in line with expectations, but slightly slower than the revised 0.7% expansion seen in the third quarter.

Germany's consumer price inflation slowed as estimated in January, final data from Destatis showed Wednesday. The consumer price index rose 1.6% year-on-year after 1.7% increase in December, final data from Destatis showed Wednesday. The rate came in line with preliminary estimate.

Retail sales in the US unexpectedly decreased in the month of January, the Commerce Department revealed in a report on Wednesday. The Commerce Department said retail sales fell by 0.3% in January compared to economist estimates for a 0.2% uptick in sales.

A report released by the Commerce Department on Wednesday showed business inventories in the US rose by slightly more than anticipated in the month of December. The Commerce Department said business inventories climbed by 0.4% in December, matching the increase seen in November. Economists had expected inventories to rise by 0.3%.

Copyright RTT News/dpa-AFX