Europe close: Stocks jump on U.S. CPI data

(Sharecast News) - European stocks jumped after U.S. consumer price figures for October printed a tad below economists' forecasts, prompting speculation of interest rate cuts by the Federal Reserve, America's central bank. "Fed rate cut expectations have been brought forward to May 2024 with analysts now anticipating to see four rate cuts before the end of next year and rates to come back down to 4.25% to 4.50%," said IG senior market analyst Axel Rudolph.

"EUR/USD and GBP/USD rallied to two-month highs."

The Stoxx 600 index added 1.34% to 452.60, with gains of 1.76% for the German Dax, while the French Cac-40 put on 1.39%.

The annual rate of increase in core and headline US CPI printed at 3.2% and 4.0%, respectively.

Both readings were a tenth of a percentage point less than anticipated.

It was a busy day for economic data in Europe too, with Eurostat reporting that euro area gross domestic product shrank by 0.1% quarter-on-quarter over the three months to September.

The ZEW Institute's closely followed gauge for economic sentiment in Germany on the other hand jumped from -1.1 in October to 9.8 for November (consensus: 5.0).

In company news, Glencore performed well in London, with its shares up by almost 5% after announcing plans to spend $6.9bn on a 77% stake in Teck Resources' steelmaking coal business in Canada's Rocky Mountains, Elk Valley Resources. EVR, located between British Columbia and Alberta, produced 21.5m tonnes of steelmaking coal in 2022, generating a pre-tax profit of C$6bn (£3.5bn).

German car parts group Continental AG was up 2% after Monday's news that it was cutting 5,500 job cuts in a major restructuring move.