June 12 (Reuters) – European stocks rose on Wednesday ahead of key US inflation data that will determine whether the Federal Reserve could end its rate hikes soon, while major British lenders rose after the stress test of the Bank of England.
The pan-European STOXX 600 index (.STOXX) it was up 0.7% at 8:33 GMT, extending gains into the fourth straight session.
US data, due for release at 1230 GMT, is expected to show the consumer price index (CPI) moderating to 3.1% yoy in June after rising 4% in May, while that core inflation is also expected to slow on a yearly basis.
While the reading is unlikely to affect expectations of a 25 basis point rate hike by the Fed in July, it could raise hope that the US central bank may end its tightening soon. after that.
“Softer CPI numbers could be enough to put the Fed on pause rather than continue raising throughout the year. (Conversely), strong numbers could be enough to see everything reverse and stocks come under pressure again.” said Stuart Cole, chief macroeconomist. at Equity Capital.
UK Virgin Money (VMUK.L) rose 7.5% to outperform the STOXX 600, while Lloyds shares (LLOY.L)barclays (BARC.L) and HSBC (HSBA.L) rose between 1.1% and 3% after the Bank of England said Britain’s eight biggest lenders presented No capital shortfalls.
“If UK banks were adequately capitalised, that’s probably true for most of the big European banks,” Cole added.
Gains at lenders boosted the UK’s FTSE 100 index (.FTSE) 0.8%, while the European Banks Index (.SX7P) rose 0.9%.
Europe’s tech sector (.SX8P) was the biggest gainer, 1.7% more than semiconductor companies including Aixtron (AIXGn.DE)ASM International (ASMI.AS) and Infineon (IFXGn.DE)it was up 3-4% after Jefferies raised price targets on the stock.
At the bottom of the STOXX 600 index, Air France-KLM (AIRF.PA) shares fell 4.3% after Deutsche Bank cut the shares to “hold” from “buy.”
nexi italian (NEXII.MI) fell 1.4% after Banco BPM (BAMI.MI) He said he would negotiate a payment agreement with another bidder. Banco BPM’s shares advanced 1.3%.
Such(TCFP.PA) It rose 2.1% after the French defense group said it had started talks to buy supplier Cobham Aerospace Communications for $1.1bn.
On the euro zone economic data front, Spanish domestic consumer prices rose 1.9% in the 12 months to June, below the 3.2% rise in the period to May, a final reading showed. .
Reporting by Matteo Allievi in Gdansk and Amruta Khandekar in Bangalore; Edited by Sohini Goswami
Our standards: The Thomson Reuters Trust Principles.
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