Europe stocks open higher, UK inflation below expectations
London, UK – In a positive start to the trading day, European stock markets opened higher this morning. Investors were cautiously optimistic as they digested the latest economic data and news from various countries.
One of the main headlines of the day is the UK inflation rate for the month of June. The annual consumer price inflation came in at 7.9%, which is below the consensus estimate of 8.2%. This figure represents a decline from the 8.7% recorded in May. However, core inflation remained high at 6.9%, slightly lower than the expected 7.1%. Services annual inflation also dipped slightly from 7.4% to 7.2%.
The lower-than-expected inflation figures may lead to a reassessment of whether the Bank of England will proceed with a second consecutive 50-basis point rate hike on August 3rd. The bank is currently grappling with strong wage growth, and these new numbers might impact its decision.
Moving away from the UK, New Zealand’s consumer price index recorded a growth rate of 6% year on year for the second straight quarter. This represents a slowdown from the 6.7% recorded in the first quarter and the 7.2% in the fourth quarter of 2022. On a quarter-on-quarter basis, the consumer price index rose by 1.1%, slightly lower than the 1.2% recorded in the previous quarter.
In Japan, business sentiment weakened as the Reuters Tankan survey showed a decline among large Japanese manufacturers. This is the first time in six months that the index has recorded a decline, with the manufacturing index falling from +8 in June to +3. The non-manufacturers index also saw a second straight month of decline, dropping by one point to +23.
In the US, stock futures opened lower Tuesday night. Dow Jones Industrial Average futures fell by 11 points, or 0.03%, while S&P 500 futures and Nasdaq 100 futures dipped by 0.05% and 0.11%, respectively.
In after-hours trading, Carvana shares experienced a significant drop of more than 10%. The online auto retailer announced that it would release its second-quarter earnings results on Wednesday, ahead of schedule.
Overall, the markets continue to react to various economic indicators and news from different countries. Investors are closely monitoring inflation rates, business sentiment, and company earnings reports to guide their investment decisions.
– Reporting by Jenni Reid, Lim Hui Jie, and Sarah Min