The mood of investor euphoria brought by the slowdown in US inflation also carried over to the other side of the Atlantic, giving impetus to European indices to move higher at the close of trading.
In particular, the pan-European Stoxx index finally closed the session up 0.9% after most of it had moved indifferently with small changes around yesterday’s close.
The main boost to the index was given by the retail sales sector, which jumped 3%.
In the individual European dashboards, the German DAX finished at 13,700 points with a strong gain of 1.25%, the French CAC 40 strengthened by 0.5% moving to 6,523 points, as well as the British FTSE which was at 7,507 points with smaller gains of the order of 0.25%.
The picture was similar in the markets of the region, where in Italy the FTSE MIB closed at +0.95% and 22,702 points, while in Spain the IBEX 35 strengthened by 0.45%, ending at 8,352 points.
In news of the day, as reported midday in Europe, the US Consumer Price Index rose at an annual rate of 8.5% in July, falling sharply from a 40-year high to 9.1% in June, when analysts had expected milder decline to 8.7%.
Although inflationary pressures remain intense, the decline in the rate of price growth raises the expectation that the US Federal Bank will proceed more gently in its interest rate increases, as the head of the Fed had estimated at its last meeting in July Jerome Powell, signaling a global counterattack on stock markets.
Tellingly, after the release of inflation data today, bets on the Fed’s next move in September completely reversed, with the odds of another giant 75 basis point rate hike plummeting to 32% from 68%. which was before the announcements.
Back in Europe and individual stock returns, British insurer Aviva jumped 12% after beating estimates in its half-year results.
Ahold Delhaize rose about 8% on the back of strong second-quarter results the Dutch retailer reported while also announcing its plan to spin off its Bol.com subsidiary.
Denmark’s Vestas rallied as much as 9% as the turbine maker maintained its guidance for the year despite missing market estimates in the second quarter.
In contrast, German pharma Evotec saw its stock plunge 8% after Morgan Stanley downgraded it to “underweight.”