Europe open: Stocks rise as US and UK inflation eases, China data improves

by | Nov 15, 2023

(Sharecast News) – European stock markets rose on Wednesday morning after consumer price data from both the US and UK showed that inflation fell more than expected in October, raising hopes that policymakers may be done with interest-rate hikes for now.
The pan-European Stoxx 600 index was up 0.5% at 454.8 by 0828 GMT, with gains across the board, though London’s FTSE 100 was outperforming the rest of the continent, jumping 1% early on.

The Office for National Statistics reported that the annual rate of UK inflation dropped to a two-year low of 4.6% last month, substantially lower than the 6.7% growth seen in September and below the 4.8% expected by analysts.

“Overall, the latest inflation numbers should continue to assuage earlier concerns about the stubbornness of UK inflation,” said Martin Beck, chief economic advisor to the EY ITEM Club. “They also reinforce the EY ITEM Club’s view that the Bank of England will start cutting interest rates from late next spring, sooner than markets currently expect.”

The downside surprise followed in the footsteps of US inflation stats out on Tuesday afternoon, which showed that annual inflation eased from 3.7% to 3.2% in October, below market forecasts. The figures saw the S&P 500 and Nasdaq rise 1.9% and 2.4%, the indices’ best daily performances since April.

Markets across Asia surged overnight too, after Chinese retail sales and industrial production grew more than predicted in October, jumping 7.6% and 4.6%, respectively. The Hang Seng index rose nearly 4%, while the Nikkei 225 gained 2.5%.

“Reports suggesting that China is contemplating CNY 1 trillion in new funding for the housing market further boosted investor confidence,” said analyst Patrick Munnelly of Tickmill Group. “Additionally, the People’s Bank of China conducted its largest Medium-term Lending Facility net injection in seven years. The confluence of these factors resulted in a favourable environment for Asia-Pacific stocks, reflecting the impact of global economic data and central bank signals on regional markets.”

Siemens Energy and Experian jump

Munich-based energy tech giant Siemens Energy saw shares surge over 7% despite reporting a €4.6bn full-year net loss on Wednesday. The company said it was reviewing the structure of its wind turbine division, Siemens Gamesa, but managed to secure a €12bn credit line from lenders, with the German government providing a loan guarantee.

In London, data services specialist and consumer credit ratings firm Experian delivered a solid set of first-half results with all regions contributing positively to growth, as it reiterated its guidance for the full year. The stock rose 5% despite an in-line set of results. Analysts at Shore Capital said, after the recent warning from sector peer TransUnion which last month reported weak quarterly figures and cut its full-year outlook, Experian’s results “will come as a relief to many”.

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