European markets ascended on Wednesday as investors evaluated incoming corporate earnings and inflation prints in both the U.S. and the U.K.
The pan-European Stoxx 600 index was up 0.5% by early afternoon, with media stocks adding 1.1% to lead gains as most sectors and major bourses advanced, with earnings the main driver of share price movement.
U.K. inflation data remained unchanged at 4% year-on-year in January, as revealed by new figures Wednesday morning, falling short of expectations due to easing prices of food and non-alcoholic beverages.
The CPI reading preceded a fourth-quarter gross domestic product print on Thursday that could potentially confirm the country’s entry into a technical recession.
The Stoxx 600 index concluded Tuesday’s session with a 1% decline. Losses were exacerbated following the release of new data indicating that U.S. inflation increased more than anticipated in January, with persistently high shelter prices putting pressure on consumers.
The headline Consumer Price Index rose by 0.3% month-on-month and 3.1% annually, as reported by the Bureau of Labor Statistics, surpassing a Dow Jones consensus forecast of 0.2% for the month and 2.9% year-on-year.
The hotter-than-expected print suggests that the U.S. Federal Reserve might exercise more caution regarding the possibility of reducing interest rates as swiftly and substantially as the market anticipates.
Wednesday witnessed earnings reports from several major European businesses, including ABN AMRO and Capgemini.
