Eurozone gains in the wake of the US inflation announcement

With investors staring at US inflation data, which has hit a record 40 years, European stock markets closed higher.

The pan-European Stoxx 600 gained 0.7% with the raw materials sector gaining 3.2%, while the shares of the Health sector lost 0.7%. The French supplier of electrical components Rexel saw its shares gain 10.3%, occupying the top of the European blue chip index. On the opposite bank, Philips saw its shares lose 15.5% after the company released quarterly results warning of spare parts shortages, increased provisions for device recalls and higher commission costs.

On the board, the German DAX closed at 16,010.32 points, recording gains of 0.43%, the British FTSE 100 closed at 7,551.72, gaining 0.81%, while the French CAC 40, with gains of 0.75%, closed at 7,237.19 points.

In the region the Spanish IBEX 35 gained 0.16% and the Italian FTSE MIB also closed with gains of 0.65%

Global markets glanced at the latest US inflation data on Wednesday to assess the outlook for the world’s largest economy and the Fed’s next move. The consumer price index rose 7% in December from a year earlier, meaning annual inflation hit a record 40 years ago.

The data on inflation come in the wake of yesterday’s statements by Federal Reserve Chairman Jerome Powell that the central bank will use all the tools at its disposal to prevent inflation “from consolidating”.

“We know that high inflation has a serious impact,” Powell said, adding that if inflation persists for longer than expected, the Fed should raise interest rates further.

Analysts no longer rule out the possibility that the US Federal Reserve will raise four interest rates this year.