European Markets Hit Highest Level amid US Inflation Data

UTC by Bhushan Akolkar · 3 min read
European Markets Hit Highest Level amid US Inflation Data
Photo: Depositphotos

Indices across the European continent gained anywhere between 0.75-1% with sectors like autos, banks, retail, and telecoms taking the lead.

On Thursday, January 12, the European markets closed to their highest levels in eight months since April 2022. Stoxx 600, the pan-European index closed at 0.7% higher with most sectors in the positive territory.

Stocks in the retail sector mainly led up the gains closing 2% up. However, the healthcare and the chemicals sectors both ended in the red 0.1% down. But sectors like autos, banks, retail, and telecoms were all trading higher by 1%.

Earlier this week, the UK’s FTSE 100 also gained more than 0.9% surpassing the 2018 heights during Wednesday’s trading session. Similarly, the FTSE is now heading closer to its all-time high of 7877.45. During yesterday’s trading, both – Germany’s DAX and France’s CAC 40 – were up by 0.74%.

The major market movers were Ubisoft, Logitech, and Centrica. The stock of the French video game publisher Ubisoft tanked more than 21% in the early trade after the company cut its revenue guidance. Besides, the company also postponed the release of its new game “Skull & Bones”.

Logitech, the Swiss computer peripheral company tanked by 14% after missing its earnings expectations and missing down on its sales outlook. British gas owner Centrica was at the top of the European blue-chip index jumping by more than 5% after raising its full-year earnings forecast.

European Markets Cheer Dropping US Inflation Data

On Thursday, the European stock indices jumped following the release of the US inflation data. for the month of December 2022, the US inflation numbers posed the biggest decline since the early pandemic.

The consumer price index, which measures the cost of a broad basket of goods and services dropped by 0.1% for the month. Despite this decline, the headline CPI is up 6.5% from a year ago. But excluding the energy and food prices, the core CPI jumped 0.3%, which was in line with market expectations.

The inflation decline in December 2022 took place due to the steep drop in gasoline prices. During the last month, gasoline prices tumbled by 9.4% and are net down 1.5% from a year ago. Fuel oil also tanked by 16.6% for the last month leading to an overall 4.5% drop in the energy index. Mark Zandi, chief economist at Moody’s Analytics said:

“Inflation is quickly moderating. Obviously, it’s still painfully high, but it’s quickly moving in the right direction. I see nothing but good news in the report except for the top-line number: 6.5% is way too high.”

The market might still be looking to speeches from Fed officials this week.

Other market news can be found here.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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