(Sharecast News) – European shares opened higher on Friday despite German inflation data showing food and energy prices remained stubbornly high.
The pan-European Stoxx 600 index was up 0.14% in early deals, with all major bourses higher.
“After seven straight down days, European markets are attempting to claw back some lost ground, trading marginally in the green on the final trading session of the week,” said Interactive Investor analyst Victoria Scholar.
“Drinks companies like Campari, Carlsberg, Diageo, and Remi Cointreau are trading in the green after Deutsche Bank raised its price targets on these stocks.”
In economic news, German inflation eased to 6.1% in August – confirming initial readings – as elevated food and energy prices continued to outstrip the overall rate, according to official data released on Friday.
The reading compared with July’s 6.1%. On a harmonised basis CPI rose 6.4% year on year, also confirming the provisional result.
Core inflation, which strips out volatile food and energy prices, was unchanged at 5.5%, demonstrating that inflation also remained high in other product groups.
“Increases in energy and food prices exceed overall inflation and keep the inflation rate high. The base effect stemming from last year’s €9 travel ticket was also apparent in August, when it drove inflation up and reduced the dampening effect of the Germany ticket on prices. This base effect will cease to apply from the next month onwards.”
Energy product prices in August were 8.3% higher than in the same month a year earlier, following a 5.7% increase in July 2023. Electricity, in particular, cost substantially more, rising 16.6% annually.
Food prices rose 9%, slowing from 11% in July, although increases in many food groups remained “markedly higher than overall inflation”.
In France, industrial output rebounded more than expected in July, climbing 0.8% on a monthly basis compared with expectations of a 0.1% rise, after a sharp 0.9% fall in the prior month.
Reporting by Frank Prenesti for Sharecast.com
