FX.co ★ European Stocks Close Higher On Encouraging European, US Economic Data

### European Markets React Positively to Economic Data; Stocks Close Higher

**Market Overview:**

On Wednesday, European stocks experienced a broad uptick as new data indicated a slower-than-expected rise in U.S. consumer prices for April, thereby alleviating some concerns about future interest rate hikes. Investors were further buoyed by the latest round of European economic data, which also contributed to the positive market sentiment.

**Key U.S. Data:**

The U.S. Labor Department reported that consumer prices increased by 0.3% in April, slightly below the anticipated rise of 0.4%. This follows a 0.4% increase in March. Year-over-year, the consumer price growth slowed to 3.4% in April from 3.5% in March, aligning with economists’ expectations. The annual rate of core consumer price growth also decelerated from 3.8% in March to 3.6% in April, matching forecasts.

**European Market Performance:**

- **Pan-European Stoxx 600:**

- Climb: 0.59%

- **Country Specific Indices:**

- **U.K.'s FTSE 100:** Gained 0.21%, reaching a new record high.

- **Germany's DAX:** Increased by 0.82%.

- **France's CAC 40:** Rose by 0.17%.

- **Switzerland's SMI:** Settled up by nearly 1%.

**Significant Movements Within Markets:**

- **United Kingdom:**

- **Top Performers:**

- Experian: Soared over 8% after forecasting annual organic revenue growth of 6-8% for FY 2025.

- Imperial Brands, Segro, Persimmon, Flutter Entertainment, Spirax-Sarco Engineering: Increased by 4.2-5.75%.

- **Notable Gains:**

- Vodafone Group: Nearly 4% after initiating a €500 million share buyback program.

- DCC, Centrica, Fresnillo, among others saw gains ranging from 2% to 4%.

- Hunting: Surged 21% on news of a $145 million order from Kuwait Oil Company.

- **Lower Performers:**

- Burberry Group: Declined by over 7%.

- Compass Group, B&M European Value Retail, St. James's Place, Barclays Group, Ocado Group: Dropped by 1.7% to 3%.

- **Germany:**

- **Top Performers:**

- Vonovia, Siemens Energy: Both gained over 6%.

- Commerzbank: Rose by about 5% after reporting its best quarterly profit in over a decade.

- Merck: Up by 4.8% despite a smaller-than-expected drop in Q1 adjusted profit.

- **Notable Gains Across Sectors:**

- Fresenius Medical Care, Adidas, Infineon, RWE, E.ON: Displayed strong performance.

- **Underperformers:**

- Porsche, Daimler Truck Holding, Hannover Rueck: Declined by 0.8% to 1.6%.

- **France:**

- **Top Performers:**

- Teleperformance, Eurofins Scientific, Veolia: Gained between 2.4% and 3.5%.

- **Other Gains:**

- Saint Gobain, Safran, STMicroElectronics: Posted significant increases.

- **Underperformers:**

- Carrefour: Dropped by more than 4%.

- TotalEnergies, Sanofi: Decreased by 1% to 1.25%.

- **Other European Markets:**

- **ABN AMRO Bank:** Shares fell by 6% due to a weaker capital ratio in Q1 stemming from increased risk-weighted assets.

- **Finland's Neste:** Plummeted by over 14% after lowering 2024 margin guidance for renewable products.

**Economic Insights:**

- **Euro Area:**

- The economy rebounded in Q1 2023, growing 0.3% sequentially after contracting in the previous two quarters. This growth rate aligns with preliminary estimates.

- **Industrial Production:**

- Surprised to the upside with a 0.6% increase in March, driven by capital goods output, versus expectations for a 0.3% decline.

- **European Commission Forecast:**

- The euro area is projected to grow by 0.8% in 2023, consistent with prior forecasts. Growth for 2025 was revised down slightly to 1.4%.

- **European Union:**

- Expected to see a 1% growth in 2023 and 1.6% in 2025, with nearly all member states anticipated to return to growth next year.

- **France:**

- The country's consumer price inflation rate eased to 2.2% in April, marking the lowest level in over two-and-a-half years, and in line with initial estimates.

In conclusion, the easing inflationary pressures in the U.S. and the optimistic economic data from Europe have positively influenced investor sentiment, leading to considerable gains across European stock markets.