In the face of apprehensions stirred by remarks from the U.S. Federal Reserve, European stocks managed a modest ascent on Wednesday. The regional Stoxx 600 index saw a 0.5% uptick by 9:35 a.m. London time, with the majority of sectors depicting positive trends. Notably, mining stocks surged by 2.2%, albeit a 1.3% dip in the technology sector.
Simultaneously, new data unveiled on Wednesday showcased a slight ease in UK inflation, settling at 3.2% for March, a figure marginally lower than economists’ projections. This development has piqued the interest of investors, who are diligently monitoring these metrics for signals on the potential trajectory of rate adjustments by the Bank of England.
Federal Reserve Chair Jerome Powell, in a statement on Tuesday, underscored the necessity for substantial progress on the inflationary front before contemplating rate cuts. Powell emphasized the persistent shortfall in advancing towards the Fed’s 2% inflation target thus far this year.
In the broader context, Asian-Pacific markets displayed a mixed performance following a widespread selloff on Tuesday, while U.S. stock futures maintained a steady stance near the neutral line on Tuesday night. This comes after the S&P 500 registered its third consecutive day of declines.
European Stocks Open Higher; UK Inflation Eases to 3.2%
European stocks commenced trading on Wednesday on an optimistic note, as the benchmark Stoxx 600 index surged by 0.12% by 8:05 a.m. London time.
In the United Kingdom, the Office for National Statistics revealed that inflation eased to 3.2% in March. Although this figure was marginally higher than the economists’ forecast of 3.1%, it marked a decrease from the 3.4% recorded in February. Core inflation, which excludes energy, food, alcohol, and tobacco, stood at 4.2%, slightly surpassing the projected 4.1%.
Investors are vigilantly monitoring these latest figures, seeking cues on potential interest rate adjustments by the Bank of England.
France’s CAC 40 surged by 0.5%, and Germany’s DAX saw a modest increase of 0.1%, while the UK’s FTSE 100 remained relatively unchanged.
ASML Shares Decline by 4.5% Following Sales Disappointment
ASML shares faced a decline of up to 4.5% during early trading on Wednesday subsequent to the company’s failure to meet sales expectations, although it maintained its full-year outlook.
The semiconductor manufacturer reported net sales of 5.29 billion euros ($5.62 billion), falling short of the anticipated 5.39 billion euros by analysts. Net profit amounted to 1.22 billion euros, compared to the expected 1.07 billion euros.
Year-on-year, net sales plummeted by 21.6%, with net income experiencing a substantial drop of 37.4%.
LVMH Shares Rise by 2.5% Amidst Sales Slowdown
Despite a slowdown in sales, shares of luxury conglomerate LVMH soared by 2.5% in morning trade.
LVMH disclosed a 3% growth in sales for the first quarter of the year, down from the 17% growth recorded in the corresponding period of 2023. Elevated prices weighed on consumers’ purchasing decisions, particularly concerning its Louis Vuitton and Dior brands.
