European Stocks Close Lower Again On Concerns Over Inflation, Slowing Growth

(RTTNews) - European stocks closed notably lower on Wednesday as investors continued to react to Wednesday's report from the U.S. Labor Department showing hotter-than-expected consumer prices inflation in the world's largest economy.

With the inflation data raising the possibility of another aggressive interest rate hike by the Federal Reserve at its monetary policy meeting next week, investors appeared quite reluctant to pick up stocks.

Also, energy crisis continued to weigh on sentiment.

Data from the U.S. Labor Department on Wednesday showed the consumer price index inched up by 0.1% in August after coming in unchanged in July. Economists had expected consumer prices to edge down by 0.1%.

Compared to the same month a year ago, consumer prices were up by 8.3% in August, reflecting a slowdown from the 8.5% spike in July. However, economists had expected the annual rate of growth to slow to 8.1%.

Meanwhile, the annual rate of growth by core consumer prices accelerated to 6.3% in August from 5.9% in July. The annual rate of growth was expected to rise to 6.1%.

The pan European Stoxx 600 drifted down 0.86%. The U.K.'s FTSE 100 dropped 1.47%, Germany's DAX ended 1.22% down, and France's CAC 40 fell 0.37%, while Switzerland's SMI declined 1.26%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Portugal and Russia closed weak.

Spain edged down marginally, while Poland and Turkiye ended higher.

On the economic front, UK consumer price inflation slowed slightly in August from a 40-year high on a fall in fuel prices, figures from the Office for National Statistics showed.

Consumer price inflation unexpectedly slowed to 9.9% in August from 10.1% in July. The rate was forcast to rise slightly to 10.2%. On a monthly basis, the consumer price index rose 0.5%, slightly weaker than the 0.6% rise in July. Economists had expected prices to climb againg by 0.6%.

Eurozone industrial production declined more than expected in July, data published by Eurostat showed on Wednesday.

Industrial output dropped 2.3% from June, when production was up 1.1%. The pace of decline was deeper than economists' forecast of -1%.

The monthly fall was largely driven by the 4.2% decrease in capital goods output and a 1.6% fall in durable consumer goods production. In addition, production of intermediate goods was down 0.8%.

Partially offsetting these declines, non-durable consumer goods production climbed 1.2% and energy output grew 0.4%.

In the UK market, Ocado Group shares plunged 8.25%.

ABRDN, Berkeley Group Holdings, Schrodders, Melrose Industries, Rolls-Royce Holdings, CRH, Antofagasta, RS Group, Dechra Pharmaceuticals and Tesco shed 3 to 6%.

Scottish Mortgage rallied nearly 2.5%. Haleon and Pershing Square Holdings gained 1.4% and 1.1%, respectively.

In Paris, ArcelorMittal ended more than 4% down. Legrand, Vivendi, Air France-KLM, Veolia, Saint Gobain, Publicis Groupe and Airbus Group ended lower by 2 to 3.1%.

Renault rallied more than 3%. Valeo, Atos, Accor, Faurecia, Worldline and Sodexo posted moderate gains.

In the German market, Deutsche Wohnen ended 4.7% down. Covestro, BASF, RWE, Vonovia, Fresenius Medical Care, Fresenius, Munich RE, E.ON. Deutsche Post, Siemens, Siemens Healthineers and MTU Aero Engines also ended sharply lower.

KION Group shares plunged nearly 30% after a profit warning. The warehouse equipment manufacturer said it expects to report a third-quarter loss due to supply chain shortages and rising energy and material costs.

Volkswagen gained about 1.1%. Deutsche Boerse and Porsche Automobil posted modest gains.