Europe midday: Shares hold gains; SSP soars on trading update

10th Jul 2024 11:32

(Sharecast News) - European shares were higher on Wednesday as investors eyed the second day of testimony from US Federal Reserve boss Jerome Powell, while shares in travel food outlet operator SSP Group surged on an upbeat trading update,

The pan-European Stoxx 600 index was up 0.06% to 512.08 in early deals. France's CAC 40 fell 0.05% as political wrangling continued after Sunday's inconclusive national election result.

"Fed Chair Jerome Powell offered few clues about when monetary policy will be eased during his congressional testimony. Policymakers are keeping a close eye on whether restrictive rates are squeezing enough demand out of the economy and, while the one hand, he said the Labour market had cooled, it was still 'robust'," said Hargreaves Lansdown analyst Susannah Streeter.

"There is still an expectation that a rate cut could come in September, but beyond that there is still much uncertainty. Nevertheless, US indices are still hanging close to record highs, with enthusiasm over AI possibilities and hopes for a soft landing for the economy still buoying sentiment."

"Eyes will now be drawn to tomorrow's Consumer Price Inflation report for indications about the future direction of travel. Another shift lower in headline inflation is expected, which should help maintain the largely optimistic outlook. A reading of 3.1% year-on-year is expected in June, down from 3.3% in May."

On the economics front, Chinese inflation unexpectedly slowed in June, according to figures from the National Bureau of Statistics on Wednesday, adding to concerns that consumer demand is keeping a lid on the economic recovery.

The consumer price index increased at a year-on-year rate of just 0.2% last month, after holding steady at 0.3% for the preceding two months. The consensus forecast was for a slight acceleration in price growth to 0.4%.

In equity news, shares in airport and train station food outlet operator SSP Group surged as the company held annual guidance after third quarter sales rose 16%, driven by increasing demand for leisure travel. Like-for-like revenue was up 6%.

Kongsberg was higher after reporting a 21% rise in operating revenue.

Travis Perkins rose as it announced the appointment of Pete Redfern as its new chief executive officer on Wednesday, and Geoff Drabble as chair designate, in two big changes to its leadership team.

UK and Ireland building materials group Grafton fell as it reported a fall in half-year sales as consumers retrenched spending on home improvements.

Reporting by Frank Prenesti for Sharecast.com