Europe open: Shares down as investors digest UK inflation data
17th Jul 2024 07:38
(Sharecast News) - European shares opened lower on Wednesday as investors digested the latest UK inflation figures which came in slightly higher than forecast, dampening hopes of a rate cut from the Bank of England, while shares in Danish hearing aid company Demant tanked after a profit warning.
The pan-European Stoxx 600 index was down 0.31% at 515.82, continuing the negative sentiment of recent sessions.
UK inflation came in at 2% on an annual basis in June, according to official data released by the Office for National Statistics. This was slightly higher than the forecast 1.9%, but in line with the previous month's 2% and the Bank of England's target rate.
The ONS said that restaurant and hotel prices, which rose "strongly", were the largest upward contributor. Second-hand car costs fell, but by less than this time last year.
However, that was offset by widespread sales pushing down clothing and footwear prices.
Core CPI, which excludes the more volatile elements of energy, food, alcohol and tobacco, rose by 3.5% in the 12 months to June, also unchanged on May.
"Services inflation still looks too high for comfort. The Bank has long said it is data-driven and today's numbers don't look soft enough across the board to convince the policy committee to change gear," said Dan Coatsworth, investment analyst at AJ Bell.
In equity news, shares in Adidas were up after the German sportswear company lifted full-year guidance for the second time this year, having beaten expectations with its second-quarter results on Tuesday.
Demant shares were at the bottom of the Stoxx with an 11% fall after the Danish hearing aid maker cut its full-year outlook, citing a "significant" loss of market share for the managed care brand.
ASML fell on geopolitical concerns and a potential trade war with China, even as the world's largest supplier of chipmaking equipment second-quarter earnings beat expectations.
EssilorLuxottica was down as the eyewear firm said it had signed a deal to buy streetwear brand Supreme from VF Corp $1.5bn in cash.
Reporting by Frank Prenesti for Sharecast.com