December 2, 2023
European shares rebound after US inflation data eases sentiment

European shares rebound after US inflation data eases sentiment

Shreyashi Sanyal

(Reuters) – European shares rose on Wednesday after a lower-than-expected reading of U.S. inflation last month provided some relief to investors.

The pan-European STOXX 600 index rose 0.89% to close at 439.88 points, its best session in almost two weeks.

US consumer prices were unchanged in July due to a sharp drop in gasoline prices.

“If US consumers are more confident and have more money in their pockets because inflation isn’t too complicated at home, they can spend more in Europe and the UK, and for multinationals exporting to the US,” said Danny Hewson, financial analyst at AJ Bell.

But while lower energy prices have helped curb U.S. inflation, supply and demand risks paint a bleak picture for Europe, analysts noted.

“Unfortunately, difficulties in obtaining energy from non-Russian sources could see European gas prices rise as demand picks up later in the year,” said Joshua Mahoney, senior market analyst at online trading platform IG.

The STOXX 600 has struggled this month with poor economic data, rising geopolitical tensions and fears that higher rates could push the economy into recession.

In London, the Financial Times index rose 0.25% to 7,507.11 points.

In FRANKFURT, the DAX index rose 1.23% to 13,700.93 points.

In PARIS, the CAC-40 index rose 0.52% to 6,523.44 points.

In MILAN, the Ftse/Mib index rose 0.95% to 22,702.44 points.

In MADRID, the Ibex-35 index rose 0.49% to 8,352.80 points.

In LISBON, the PSI20 index fell 0.50% to 6,210.24 points.