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FTSE 100 rises and Wall Street mixed as US and EU inflation eases

How major markets are performing on Thursday

FTSE 100: Christine Lagarde, President of the European Central Bank
The FTSE 100 and European stock markets pushed higher on Thursday after EU inflation data. (Anadolu via Getty Images)

European stock markets pushed higher on Thursday, as Wall Street was on mixing footing, on the back of easing inflation data in both the US and in the European Union (EU).

In London, the FTSE 100 (^FTSE) was trading 0.5% higher, while the CAC (^FCHI) also gained 0.5% in Paris despite the French economy shrinking unexpectedly in the last quarter.

The Frankfurt DAX (^GDAXI) was 0.3% higher on the day, and the STOXX 600 (^STOXX) advanced 0.5% during the session.

Across the pond, the S&P 500 (^GSPC) fell 0.5%, and the tech-heavy Nasdaq (^IXIC) was 0.6% lower. The Dow Jones (^DJI) however, advanced 0.8% by the time of the European close.

It came as as traders digested news that EU inflation fell to 2.4% this month, nearing the European Central Bank's (EBC) target of 2%. The drop was sharper than expected as falling energy prices ease the cost of living crisis.

According to statistics body Eurostat, this was down from 2.9% the month before, and was the slowest annual pace since July 2021 across the single currency bloc.

Economists had forecast that the inflation rate would fall to 2.7%.

Core inflation, which excludes volatile food and energy prices, fell from 4.2% to 3.6%, ahead of estimates of a drop to 3.9%.

Economists are now expecting the European Central Bank (ECB) to start cutting interest rates in June rather than September.

Read more: Trending tickers: Tata Technologies | ASML | Tesla | Dr Martens

The latest flash CPI inflation numbers from Germany and Spain that were released yesterday, showing that inflation in Europe is tumbling at an accelerated rate.

Meanwhile, updated GDP data released this morning showed that France’s economy contracted by 0.1% in the period from July to September.

This was worse than the first estimate of 0.1% growth for Q3, and follows growth of 0.6% in Q2.

"Yesterday saw a broadly positive session for markets in Europe with the DAX outperforming, while the FTSE100 slipped back for the third day in succession, in a month which has seen the UK benchmark underperform significantly compared to the rest of its peers," Michael Hewson, chief markets analyst of CMC Markets, said.

"The DAX and S&P 500 look set post their best month of gains since November last year as investors start to price in the prospect of rate cuts next year in the face of sharply slowing inflation."

Read more: Microsoft to invest £2.5bn in UK AI sector

Meanwhile, across the pond, the Federal Reserve’s preferred measure of US inflation fell further than expected last month as traders look to further interest rate cuts in the first half of next year.

The personal consumption expenditure (PCE) index came in at 3% in the year to October, down from 3.4%. This was lower than the 3.1% expected.

Core PCE, which excludes volatile food and energy prices, slowed from 3.7% to 3.5%.

Live coverage is over
  • Latoya Harding

    Market close and recap

    Well that's all from us today, thanks for following along" Be sure to join us again tomorrow when we'll be back for more.

    It was a busy day today so here's a quick recap of some of the top stories...

    Eurozone inflation falls more than expected to 2.4%

    US inflation falls further than expected

    OPEC+ agrees extra supply cuts

    Metro Bank plans to cut 20% of its workers

    French economy shrinks 0.1% in third quarter

    Lloyds to close 45 bank branches

    Dr Martens shares plunge 25% on profit warning

    Tata Technologies Surges 180% after IPO

    UK property transactions plunge 17% in October

    Microsoft to invest £2.5bn in UK AI sector

    Have a good evening folks!

  • Latoya Harding

    Brazil to join OPEC+

    More OPEC news...

    Brazil is set to join the OPEC+ oil alliance, according to reports.

    OPEC is currently made up of Iran, Iraq, Kuwait, Saudi Arabia, Venezuela, Libya, the United Arab Emirates, Algeria, Nigeria, Ecuador, Angola, Equatorial Guinea and Congo.

    While OPEC+ includes allies such as Russia, Mexico and Kazakhstan. Brazil, the largest economy in South America, will be a part of the group of nations who are honourary members of the cartel.

  • Latoya Harding

    OPEC+ agrees extra supply cuts

    The OPEC+ cartel of oil producing nations has agreed to cut supplies by one million barrels per day.

    The cuts are in addition to the one million Saudi Arabia has already been carrying out since the summer.

    The group announced that it would extend the timeframe of the cuts, according to delegates at the virtual gathering of the alliance today.

  • Latoya Harding

    US inflation falls further than expected

    The Federal Reserve’s preferred measure of US inflation fell further than expected last month as traders look to further interest rate cuts in the first half of next year.

    The personal consumption expenditure (PCE) index came in at 3% in the year to October, down from 3.4%. This was lower than the 3.1% expected.

    Core PCE, which excludes volatile food and energy prices, slowed from 3.7% to 3.5%.

  • Latoya Harding

    Former UK chancellor Alistair Darling dies at 70

    Alistair Darling was chancellor from 2007 to 2010
    Alistair Darling was chancellor from 2007 to 2010

    Alistair Darling, who was a former Labour chancellor of the exchequer, has died at the age of 70, a spokesman on behalf of his family said.

    Labour politician ran the Treasury between 2007 and 2010, during the financial crisis.

    A statement issued on behalf of the family said:

    The death of Alistair Darling, a former Chancellor of the Exchequer and long-serving member of the Labour cabinet, was announced in Edinburgh today.

    Mr Darling, the much-loved husband of Margaret and beloved father of Calum and Anna, died after a short spell in Western General Hospital under the wonderful care of the cancer team.

  • Latoya Harding

    Microsoft to invest £2.5bn in UK AI sector

    Microsoft CEO Satya Nadella
    Microsoft CEO Satya Nadella

    Microsoft (MSFT) has committed to spending £2.5bn to expand its AI datacentre footprint in the UK, in a move that will train more than one million people for the AI economy.

    Microsoft will spend £2.5bn over the next three years to expand its next generation AI datacentre infrastructure in what is the single largest investment in the company’s 40-year history in the country.

    Under the expansion plan, Microsoft will grow its UK AI infrastructure across sites in London and Cardiff. There is also a potential expansion in northern England.

    To support UK workers across the AI economy, Microsoft will train one million people with the skills they need to build and work with AI, including expanded training for people looking to start, or move into, a career in AI.

    Microsoft will also bring over 20,000 of advanced Graphics Processing Units (GPUs) – which are crucial for machine learning and the development of AI models – to the UK by 2026.

    Read more here

  • Latoya Harding

    December train strikes to still go ahead

    Following the RMT news below, Brits are still set for commuting nightmares in December as train drivers represented by Aslef are still to strike.

    This is a separate dispute to RMT members.

    All Aslef members will refuse to work overtime from Friday, December 1 to Saturday, December 9.

    It comes as Aslef so far has held 14 one-day strikes during the 18-month dispute, causing huge disruption to services across the country.

  • Latoya Harding

    RMT members accept deal to end pay dispute

    Members of the RMT union have voted to accept a deal to end a dispute over pay and conditions. It comes after months of disruption on UK railways.

    The offer was made by the UK’s Rail Delivery Group, which included a 5% pay increase for 2022.

    It also came with a guarantee of no compulsory redundancies until December 2024.

    RMT general secretary Mick Lynch said:

    “Our members have spoken in huge numbers to accept this unconditional pay offer and no compulsory redundancies until the end of 2024.

    “I want to congratulate them on their steadfastness in this long industrial campaign.

    “We will be negotiating further with the train operators over reforms they want to see. And we will never shy away from vigorously defending our members terms and conditions, now or in the future.

    “This campaign shows that sustained strike action and unity gets results and our members should be proud of the role they have played in securing this deal.”

  • Latoya Harding

    OPEC+ makes preliminary agreement for extra output cut

    Reuters has reporting that the OPEC+ group has reached a preliminary agreement for an additional oil output cut of more than 1 million barrels per day.

    This is allegedly from an OPEC+ source, ahead of the formal meetings due to take place later today. They were previously delayed last week.

    Under the deal, Saudi Arabia would extend its voluntary cut of one million barrels per day, which it has had in place since July, along with additional contributions from other members, Reuters reported.

    Saudi Arabia, Russia and other members of Opec+ pump more than 40pc of the world’s oil, or some 43m barrels per day.

  • Latoya Harding

    UK property transactions plunge 17% in October

    UK property transactions London- Terraced residential houses in Fulham SW6 area of south west London
    UK property transactions London- Terraced residential houses in Fulham SW6 area of south west London

    UK property transactions fell 17% in October as high interest rates are making it harder to climb the property ladder.

    There were 90,920 UK residential transactions in October, which is 2% lower than in September and 17% lower than October 2022, according to the latest figures from HM Revenue & Customs (HMRC).

    Looking at the same data on a seasonally adjusted basis, HMRC said that transactions there were 82,910 transactions in October 2023 which is 21% lower than October 2022 and 3% lower than September 2023.

    Anna Clare Harper, CEO of sustainable investment adviser GreenResi, said the fall in housing transaction is not surprising.

    Firstly, we are still coming down from a bubble caused by COVID and stamp duty reductions, which created double-digit house price growth for much of the past three years,” she said.

    Secondly, the higher base rate is designed to cool demand and therefore pricing in the economy, and it is working to plan.

    Sentiment is subdued across the property market. However, for investors it’s a time of opportunity since rental demand has never been stronger, and it is a good time to negotiate on purchase price."

Watch: How does inflation affect interest rates?

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