European Stocks Close Weak On Hotter-than-expected U.S. Inflation Data

(RTTNews) - European stocks closed weak on Thursday, as hotter-than-expected U.S. consumer price inflation data has further offset optimism the Federal Reserve will continue to aggressively lower interest rates in the coming months.

Data from the Labor Department showed that its consumer price index rose by 0.2% in September, matching the increase seen in August. Economists had expected consumer prices to inch up by 0.1%.

The report also said core consumer prices, which exclude food and energy prices, climbed by 0.3% for the second consecutive month. Core prices were expected to rise by 0.2%.

Meanwhile, the Labor Department said the annual rate of consumer price growth slowed to 2.4% in September from 2.5% in August. Economists had expected the pace of price growth to slow to 2.3%. The annual rate of core consumer price growth accelerated to 3.3% in September from 3.2% in August, while economists had expected the pace of growth to remain unchanged.

CME Group's FedWatch Tool is currently indicating an 88.4% chance the Fed will lower rates by 25 basis points next month after slashing rates by 50 basis points last month.

In European economic news, Germany's retail sales increased in August, growing 1.6% on a monthly basis, after a 1.5% gain in July and a 1.1% drop seen in June, Destatis reported. On a yearly basis, retail sales posted a growth of 2.1% in real terms and 3.1% in nominal terms.

Elsewhere, a closely watched gauge of U.K. house prices turned positive for the first time in almost two years, boosted by expectations of more interest rate cuts by the Bank of England.

The pan European Stoxx 600 ended down 0.18%. The U.K.'s FTSE 100 edged down 0.07%, Germany's DAX and France's CAC 40 closed lower by 0.23% and 0.24%, respectively, and Switzerland's SMI dropped 0.37%.

Among other markets in Europe, Austria, Finland, Greece, Iceland, Ireland, Netherlands, Poland, Portugal, Spain, Sweden and Turkiye closed weak.

Denmark, Norway and Russia ended higher, while Belgium closed flat.

In the UK market, Vistry Group ended nearly 4% down, after the company warned of lower-than-expected profits over the next three years due to building costs being underestimated by 10% across nine of its South division housing developments.

Taylor Wimpey, BAE Systems, Whitbread, WPP, Intertek Group, Croda International, Barratt Developments and Smiths Group lost 2 to 4%.

Fresnillo, Beazley and GSK gained 3.2 to 3.5%. GSK gained after the company said that it has agreed to pay up to $2.2 billion to settle most lawsuits in U.S. state courts.

Next, Endeavour Mining, Hiscox, BP and Antofagasta ended higher by 1 to 2%.

In the German market, Rheinmetall dropped about 3.7%. Siemens Energy and Deutsche Post closed lower by about 2.6% and 2.3%, respectively. Bayer, Fresenius, Adidas and Vonovia also ended notably lower.

BMW shares ended weak after the carmaker reported a 13% decline in sales in the third-quarter.

Munich RE and Hannover Rueck both gained nearly 3%. Deutsche Telekom climbed about 1.7% after the company said it plans to propose a buyback program of as much as €2 billion ($2.2 billion) in 2025.

In the French market, Teleperformance drifted down 2.7%. Eurofins Scientific closed down 2%, while Unibail Rodamco, Safran, Schneider Electric, Essilor, Carrefour, Legrand and Edenred lost 1 to 1.5%.

Engie ended 1.1% up. Veolia, TotalEnergies, Societe Generale and AXA posted moderate gains.