European stocks ended higher on Wednesday as investors processed U.S. inflation data for March, which exceeded expectations.
The pan-European Stoxx 600 index closed up 0.12%, rebounding from earlier losses following the data release.
Initially, technology stocks, sensitive to interest rate changes, dipped before recovering to finish the session up 0.5%. In contrast, utilities declined by 1.3%.
The headline inflation rate in the U.S. came in at 3.5% year-on-year, surpassing the 3.4% expected by economists surveyed by Dow Jones.
This was also 0.3 percentage points higher than February’s rate. Core CPI rose 0.4% on a monthly basis and 3.8% from a year ago, both exceeding forecasts.
U.S. stocks traded lower following the release of the data.
Richard Carter, head of fixed interest research at Quilter Cheviot, commented, “These monthly readings will have dashed any remaining hopes of a Fed rate cut as early as May.
Markets are still hoping for a rate cut this summer, but the Fed will be looking for consistent signs of disinflation in the coming months before making the call.”
In other news, Swiss chocolate-maker Barry Callebaut, a supplier for Magnum ice creams and KitKat bars, saw its shares rise by 9.7% after reporting half-year results showing higher revenue but a significant drop in net profit.
In Asia-Pacific markets, most indices fell on Wednesday as Japan’s corporate inflation rose in March, and investors assessed rate decisions from New Zealand and Thailand’s central banks.
Fitch also revised its outlook on China’s sovereign credit rating to negative, grabbing further attention.
