Investing
European shares dip as U.S. inflation data looms; Ahold jumps
Global Banking & Finance Review®
Company
By Shreyashi Sanyal
(Reuters) -European shares edged lower on Wednesday on losses in technology stocks ahead of key inflation data from the United States, while gains in supermarket major Ahold Delhaize kept declines in check.
The pan-European STOXX 600 index dipped 0.1%, tracking a second straight session of losses after a strong start to the week.
A higher-than-expected U.S. Consumer Price Index report for July could spook markets after a surprisingly robust hiring report last week. Markets are expecting a high chance of a 75 basis point interest rate hike by the Federal Reserve next month as the U.S. central bank remains focused on taming decades-high inflation.
“Markets seem to be going into today’s all-important U.S. CPI a little on the apprehensive side,” Deutsche Bank strategist Jim Reid wrote.
“It’s certainly possible that a decent fall in the headline number could give a market hungry for positive inflation news a big flip. We will see.”
Rate-sensitive tech stocks shed 0.5%, leading sectoral declines. Euro zone money markets now fully price in a half-point interest rate hike by the European Central Bank in September. [GVD/EUR]
European chipmakers were mixed on Wednesday after U.S. peer Micron Technology’s dour forecast sparked a fresh tech rout on Wall Street overnight.
The STOXX 600 has struggled this month on worries over gloomy economic data, rising geopolitical tensions and fears that higher interest rates could tip the economy into a recession.
But helping the STOXX 600 cut back losses on the day was a 6.8% jump in Ahold Delhaize, powering it to the top of the index.
The Dutch company said it was postponing plans for an initial public offering of its non-food retailer, Bol.com, because of unfavourable market conditions.
Wind turbine maker Vestas jumped 9% after it said it would sell its converters and control panels business to KK Wind Solutions.
Shares in ABN Amro rose 2.5% after the Dutch bank beat analyst expectations with a jump of 21% in second-quarter net profit.
(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Sriraj Kalluvila)
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured by the Consumer Price Index (CPI).
The Consumer Price Index (CPI) measures the average change over time in the prices paid by consumers for a basket of goods and services, serving as an indicator of inflation.
Interest rates are the cost of borrowing money or the return on savings, expressed as a percentage. They are influenced by central banks and affect economic activity.
Technology stocks are shares of companies involved in the technology sector, including software, hardware, and IT services. They can be sensitive to changes in interest rates and economic conditions.
A market index is a measurement of the performance of a group of assets, often used to gauge the overall market or a specific sector's performance. Examples include the STOXX 600 and S&P 500.
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