(Sharecast News) – European markets rallied at midday on Tuesday as eurozone inflation unexpectedly slowed, boosting sentiment, while investors turned their attention to the start of the US Federal Reserve’s two-day monetary policy meeting.
The pan-European Stoxx 600 index was up 0.11% barely moved the needle, with regional markets mixed.
Inflation in the Eurozone unexpectedly slowed last month, as Eurostat revised down earlier ‘flash’ estimates for August on Tuesday.
The annual rise in consumer prices across the single-currency region eased to 5.2% in August, from 5.3% in July and 5.5% in June. The initial estimate showed inflation as unchanged at 5.3%.
The rise in food, alcohol and tobacco prices slowed to 9.7% year-on-year, from 10.8% and 11.6% in July and June, respectively.
However, the core measure of inflation, which excludes volatile items like food and energy, confirmed the flash reading at 5.3%, down from 5.5% in July.
Markets are expecting the central bank to hold interest rates steady when the decision is announced on Wednesday. Traders will also be eyeing a crucial inflation reading from the eurozone later in the morning.
Sentiment was also tempered by the Brent crude oil price, which hovered at the $95-a-barrel-mark on supply curb worries. The benchmark commodity is now at its highest level since last November.
Prices are now on track for their biggest quarterly increases since Russia’s invasion of Ukraine in the first quarter of 2022. Earlier this month, Saudi Arabia and Russia extended a combined supply cut of 1.3 million barrels per day to the end of the year.
In equity news, DIY retailer Kingfisher fell after lowering earnings guidance on the back of weaker sales in France and Poland.
Travel giant Tui took off after reiterating its full-year outlook on te back of strong summer and future winter bookings.
Reporting by Frank Prenesti for Sharecast.com