Europe open: Shares stage mini-rally after Tuesday sell-off
By Frank Prenesti
Date: Wednesday 17 Apr 2024
(Sharecast News) - European shares staged a small rally at the open on Wednesday after a major sell-off a day earlier as investors digested inflation news and awaited Israel's response to a missile attack by Iran on Saturday night.
The pan-European Stoxx 600 index was up 0.08% at 498.60 in early deals, with most major bourses up, despite weaker US markets and a mixed session in Asia.
France's CAC 40 outperformed with a 0.48% rise to 7970.79, while Britain's FTSE 100 fell 0.04% to 7817.3 on weaker-than-expected inflation data.
UK inflation fell to its lowest in three and a half years last month, but eased less than expected, which is likely to prompt caution from the Bank of England to get price pressures in check before cutting interest rates.
The consumer price index rose at a year-on-year rate of 3.2% in March, down from 3.4% in February but ahead of the 3.0% expected by analysts.
The core rate of inflation, which excludes volatile items like energy, food, alcohol and tobacco, eased to 4.2% in March from 4.5% the month before - hitting its lowest level since December 2021.
"The disheartening inflation data this morning hasn't helped the FTSE into positive territory. While inflation is certainly moving in the right direction, it's still higher than the market expected, which will disappoint those expecting an earlier-than-forecast interest rate cut from the Bank of England," said Hargreaves Lansdown analyst Sophie Lund-Yates.
"Core inflation has also surprised to the downside, which will have added an extra layer of pressure to early trading."
In equity news, shares in luxury giant LVMH were up after weak quarterly sales growth numbers release late Tuesday weren't as bad as feared. Sector peers Burberry and Christian Dior were also higher.
Continental shares fell after the German automotive supplier published first-quarter revenue and profit margin below expectations.
ASML fell as the largest supplier of equipment to computer chip makers reported weaker-than-expected new bookings in its first-quarter earnings on Wednesday.
Adidas shares rose as the sporting goods maker raised its 2024 profit outlook after a better-than-expected first quarter.
Reporting by Frank Prenesti for Sharecast.com
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