Europe close: Stocks add to gains after better-than-expected US CPI reading
By Alexander Bueso
Date: Wednesday 10 Aug 2022
(Sharecast News) - European shares were again higher following downside surprises for US consumer price data that appeared to take off some of the pressure on the US central bank.
In particular, the core CPI index was flat year-on-year, contrary to expectations for a rebound.
Michael Hewson, chief market analyst at CMC Markets UK, pointed out news that oil flows to Central Europe would restart through the Druzhba pipeline from Russia as another factor buoying risk appetite.
The pan-European benchmark was up 0.91% at 439.93, alongside a 1.23% jump for the German Dax to 13,700.93, while the FTSE Mibtel was ahead by 0.97% at 22,705.89.
Before Wednesday's US CPI figures, investors had been fretting still-high inflation and a hot jobs market would force the Fed into a 75 basis poiint interest rate hike at their 21-22 September meeting.
Nevertheless, while mostly upbeat, analysts were careful to note that one more CPI and two more monthly jobs reports were due out before Fed policymakers next met.
In Germany, it was confirmed that the annual rate of inflation declined in July to 7.5% from 7.6% in the previous month.
Among equity stocks, shares in Ahold Delhaize gained 7.6% after the the Dutch company said it was postponing plans for an initial public offering of its non-food retailer, Bol.com, because of unfavourable market conditions.
UK insurer Aviva was up 12.2% as it said it planned to returned more cash to investors after posting a better-than-expected 14% rise in first-half operating profit.
Wind turbine maker Vestas gained 9%, despite reporting a bigger-than-expected second-quarter operating loss hit by higher costs.
Quilter - formerly Old Mutual Wealth Management - fell 3% after reporting a decline in first-half assets under management and administration on Wednesday, but a rise in profits.
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