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European stocks were mostly higher on Wednesday midday, shaking off hotter-than-expected UK consumer price inflation, and a steep fall in Renault shares which weighed on automotive peers. Eyes stateside will be on a producer price reading, particularly in light of Tuesday’s consumer price print which weighed on Treasuries. The US banking earnings season continues, meanwhile. The FTSE 100 index traded up 16.76 points higher, 0.2%, at 8,955.08. So far on Wednesday, it has failed to reclaim the 9,000 point threshold it crossed on Tuesday. The FTSE 250 was up just 10.91 points, 0.1%, at 21,701.37, and the AIM All-Share added 4.69 points, 0.6%, at 775.72. The Cboe UK 100 was up 0.1% at 893.72, the Cboe UK 250 was up 0.2% at 19,120.06, and the Cboe Small Companies edged up 0.1% to 17,481.18. In European equities on Wednesday, the CAC 40 in Paris was flat, while the DAX 40 in Frankfurt was 0.3% higher. The pound bought $1.3403 early Wednesday afternoon, up from $1.3380 at the time of the London equities close on Tuesday. The euro rose to $1.1617 from $1.1604. Against the yen, the dollar fell to JP¥148.70 from JP¥148.97. According to the Office for National Statistics, the UK annual consumer price inflation rate accelerated to 3.6% in June, from 3.4% in May. According to FXStreet cited consensus, it had been expected to remain at 3.4% in June. Costs for the transport, particularly motor fuels, made the largest upward revision to the annual inflation rate, the ONS said. Core consumer prices, excluding energy, food, alcohol, and tobacco, rose 3.7% annually in June, topping the FXStreet cited consensus which had pencilled in another 3.5% hike, which would have matched the May increase. The annual service price inflation rate was unchanged at 4.7% in June, the ONS said. ‘UK inflation was rapid in June,’ analysts at broker Davy commented. So far this year, the Bank of England has stuck to a quarterly cutting pace. Davy analysts added: ‘Despite these factors and a relatively favourable start to this year for the UK economy especially for household spending, which has benefitted from real wage increases there is a widespread expectation for two cuts to Bank Rate in H2. We continue to expect one cut based on high inflation and wage growth. However, if the UK economy weakens again in H2 due to the spectre of tax increases in the October budget, a second cut may yet prove warranted.’ Eyes turn to a labour market reading on Thursday morning. Analysts at ING commented: ‘All the focus in UK economics circles right now is on the jobs market and whether Thursday’s jobs figures are bad enough to pressure the Bank of England into a faster pace of easing.’ In New York, the Dow Jones Industrial Average is called to open flat, the S&P 500 down 0.1% and the Nasdaq Composite down 0.2%. The yield on the US 10-year Treasury was quoted at 4.48%, unchanged from the time of the London equities close on Tuesday. The yield on the US 30-year Treasury was quoted at 5.01%, fading from 5.02%. Rabobank analysts noted that Treasury prices rose in the wake of US consumer price inflation data on Tuesday, but then were sold off as they day progressed. ‘It was difficult to attribute an exact reason for this but one potential explanation was that the components of the CPI release that feed through into personal consumption expenditures were quite strong (and so, while dependent on today’s PPI release, there could be upward revisions to PCE estimates for June),’ Rabo analysts added. Core PCE is the Federal Reserve’s preferred inflationary gauge. The latest producer price index reading is reported at 1330 BST on Wednesday. In London, Intermediate Capital Group shares rose 3.7%, the best large-cap performer. It said the investment landscape remains ‘very attractive’ as it reported an increase in assets under management in its financial first quarter. The London-based private equity investment firm said assets under management were $122.58 billion on June 30, the end of its financial first quarter, up 9.1% from $112.36 billion on March 31, or by 3% at constant currency. Year-on-year, AUM increased 22% from $101.00 billion, or by 15% at constant currency. Insurer Hiscox rose 1.5%, as Morgan Stanley raised the stock to ’overweight’. Recruiter Hays fell 2.1% after Morgan Stanley cut it ’underweight’. Elsewhere in London, McBride slumped 12%. The private label products maker expects adjusted operating profit for the year to June 30 to be in line with expectations. Revenue for the period was 0.7% higher at constant currency. However, it cautions: ‘Whilst demand for private label products remains strong, there are signs that private label market share has stabilised at current levels. In light of continuing inflationary pressures, many retailers are seeking value to support their consumer proposition with an increased requirement for cost out actions to support lower market pricing.’ Over in Paris, Renault shares slumped 17%. Late Tuesday, the car maker lowered full-year operating margin and free cash flow guidance after a lower-than-anticipated performance in June. Renault now predicts an operating margin around 6.5% in 2025, down from at least 7% before, and free cash-flow between €1.0 billion and €1.5 billion versus at least €2 billion previously. Shares in other car makers on the continent also struggled. Stellantis fell 3.6%, Volkswagen gave back 1.9% and BMW lost 0.7%. A barrel of Brent traded at $68.34 early Wednesday afternoon, down from $68.94 at the time of the London equities close on Tuesday. Gold rose to $3,336.72 an ounce from $3,331.36. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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