Prime Highlights:
- European stocks traded higher, with Zara owner Inditex jumping over 6% after strong demand for its Autumn/Winter collections.
- Novo Nordisk shares rose 3.5% even as the company announced plans to cut 9,000 jobs.
Key Facts:
- The Stoxx 600 index was up 0.5% by late morning in London, with most sectors and regional markets moving higher.
- U.S. inflation reports are due this week, with economists expecting a 0.3% monthly rise in both PPI and CPI, which could influence the Federal Reserve’s next rate decision.
Key Background:
European shares moved higher on Wednesday, buoyed by corporate earnings updates and anticipation of key U.S. inflation figures that could influence the Federal Reserve’s next policy move.
By late morning in London, the Stoxx 600 had gained 0.5%, with nearly all sectors and major European markets showing upward movement. Gains were led by retail and pharmaceutical stocks.
Inditex, the owner of global fashion brand Zara, saw its shares jump more than 6% after releasing its first-half results. While second-quarter sales fell slightly short of expectations, the company reported that its Autumn/Winter collections had been strongly received by consumers. Between August 1 and September 7, constant currency sales climbed 9% compared with the same period last year. Analysts at Citi noted that the results indicated a “meaningful acceleration in current trading,” pointing to stronger momentum going into the third quarter.
Pharmaceutical giant Novo Nordisk also advanced 3.5% after announcing plans to cut around 9,000 jobs as part of a broader restructuring effort. Despite the job cuts, investor sentiment remained positive on the company’s long-term growth outlook.
Apart from company results, investors were watching reports that U.S. President Donald Trump asked the European Union to place tariffs of up to 100% on goods from China and India, because those countries continue to buy oil from Russia. The proposal, aimed at increasing pressure on Moscow, raises fresh concerns about potential disruptions to global trade.
Inflation data remains in focus for traders worldwide. “In the U.S., inflation numbers are in focus, with the Producer Price Index (PPI) coming out on Wednesday and the Consumer Price Index (CPI) on Thursday. Analysts expect both to show a 0.3% increase from the previous month. If the forecast is correct, the yearly CPI could drop to 2.9%, while the core rate may stay at 3.1%. These results could increase the chances of the Federal Reserve cutting interest rates at its next meeting.
Meanwhile, Asian markets also posted gains, with investors reacting to China’s August inflation report. Official data showed consumer prices declined 0.4% year-on-year, a larger drop than the 0.2% fall forecast by economists.
Overall, sentiment across global markets improved as investors weighed earnings resilience against ongoing trade and inflation uncertainties.
