European stocks close higher as traders shrug off inflation worries
The pan-European Stoxx 600 ended Wednesday’s session up by 0.5% provisionally, with retail shares jumping 1.9% to lead gains while basic resources slid 0.6%.
The benchmark closed lower Tuesday — but still marked its seventh straight month of gains — following the release of euro zone inflation data for August which showed consumer prices increased by 3% this month from a year ago.
This was far above expectations and the European Central Bank’s 2% target. The data will put pressure on the central bank to address inflation concerns at a key meeting next week.
Investors are focused on August U.S. nonfarm payrolls data, which is scheduled to be released later this week, for insight into the possible path of Fed’s monetary policy. Dow Jones economists expect 750,000 jobs were created in August and the unemployment rate fell to 5.2%.
Key Data
German retail sales slipped by more than expected in July, the Federal Statistics Office said Wednesday, dropping 5.1% month-on-month in real terms against a Reuters forecast for a 0.9% fall. This followed gains of 4.5% in June and 4.6% in May.
The final August manufacturing PMI (purchasing managers’ index) reading for the euro zone came in at 61.4, slightly below an initial flash estimate of 61.5, as factory growth and price rises remained strong.
The U.K. suffered contrasting fortunes as supply chain problems pulled the manufacturing PMI down to 60.3 from July’s 60.4. IHS Markit’s gauge of U.K. factory production slid to its lowest level since February.
Spain’s manufacturing PMI came in at 59.5, an acceleration from 59.0 in July. However, supply chain disruptions and raw material supply and demand discrepancies mean manufacturing confidence dropped off.
Reference: CNBC
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