Europe open: Stocks rise for second day ahead of ECB meeting

10th Sep 2024 09:05

(Sharecast News) - European stocks rose on Tuesday morning, with weakness in London offset by decent gains elsewhere, as the Stoxx 600 continues to rebound after last week's sell-off.

The Stoxx 600 index was up 0.3% at 512.21, rising for the second straight day after a 3.5% drop last week. However, stocks in London were in the red, with the FTSE 100 down 0.4% early on as investors mulled the latest UK jobs data.

Figures released earlier by the Office for National Statistics showed the UK unemployment rate declined to 4.1% in the three months to July, from 4.2% previously, marking a six-month low and in line with economists' expectations. Meanwhile, growth in average earnings fell to 5.1%, hitting a two-year low but still well above the Bank of England's 2% inflation target.

In other news, German inflation was confirmed at 1.9% in August, its lowest level in three and a half years, according to final estimates from Destatis. The year-on-year change in consumer prices eased from 2.3% in July and matched the preliminary estimate released two weeks ago. This was the first time the consumer price index has dipped below the key 2% mark since March 2021 as energy prices dropped 5.1%, compared with a 1.7% decline in July.

Investors will now be looking ahead to Thursday's European Central Bank policy meeting, during which a 25 basis-point cut in the deposit rate to 3.5% is widely expected.

Naeem Aslam, chief investment officer at Zaye Capital Markets, said the unchanged German inflation reading on Tuesday morning was "positive news for the biggest economy in the eurozone because it confirms the fact that there is less resistance for the ECB to cut interest rates further if it wants to".

Centamin, Carlsberg in focus

Shares London-listed gold miner Centamin surged 25% after announcing an agreement to be taken over by AngloGold Ashanti in a £1.9bn deal. Under the terms of the transaction, Centamin shareholders will receive 0.06983 new AngloGold Ashanti shares and $0.125 in cash.The price represents a premium of around 36.7% to the closing share price on Monday.

Others in the sector, such as Fresnillo, Hochschild Mining and Endeavour Mining were also putting in gains.

Danish brewer Carlsberg rose in Copenhagen despite the news that UK competition regulators are looking into the company's £3.3bn takeover of Britvic. The CMA announced on Tuesday it was issuing a preliminary "invitation to comment" but has not yet opened a formal investigation.

UK pharma giant AstraZeneca was the heaviest faller on the Stoxx 600, dropping 5% with market chatter pinning the slump to disappointing results from a trial of its lung cancer treatment.