European markets lower as UK inflation misses estimate

Marks & Spencer shares are rising after the British retailer posted a 58% annual profit increase

Marks & Spencer shares rose on Wednesday, reaching levels last seen in early 2018, according to LSEG data. The company’s shares were last up 7.3% at 10:59 a.m. London time.

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Marks and Spencer

The British retailer said on Wednesday that profit before taxes and adjustments was up 58% year-on-year and reached £716.4 million ($912 million) during the full fiscal year ended March 30.

The company also said it was deepening its structural cost savings plan from £400 million to £500 million by 2028.

– Sophie Kiderlin

Cars fall 2% as concerns about tariffs from China increase

Auto shares led European markets lower on Wednesday, with the sector last down 1.97% at 10.27am London time.

Concerns about tariffs increased after China’s Global Times newspaper quoted an expert from a government-affiliated auto research organization as saying the world’s second-largest economy would have to temporarily raise import tariffs on gasoline cars with large engines.

Tariffs could reach 25%, which would be the highest possible level under World Trade Organization rules, he said.

– Sophie Kiderlin

Markets see little chance of a BOE rate cut in June following UK inflation data

Traders cut their bets that the Bank of England will cut interest rates this summer after UK inflation data came in warmer than expected.

Although nominal interest rates fell sharply from 3.2% to 2.3%, this was lower than a Reuters poll forecast of 2.1%. Both core and services inflation, which are closely watched by the BOE, were also higher than forecast.

At 8:40 a.m. in London, overnight interest rate swaps showed a 13% probability of a rate cut at the June meeting, down from around 50% before the release. The chance of a cut in August had fallen from 70% to 40%, with a cut in bank rates not fully priced in until November.

The British pound jumped on the news, trading 0.3% higher against the US dollar at $1.274, and 0.27% higher against the euro at 1.174. Both were sterling’s highest levels against the currency since March, according to LSEG data.

– Jenni Reid

European markets open lower

European markets opened lower on Wednesday, with all major stock exchanges starting the day in the red, following the release of new UK inflation data.

The pan-European Stoxx 600 was last down 0.34% at 8:10 a.m. London time.

Britain’s FTSE 100, meanwhile, traded 0.52% lower, while Germany’s DAX fell 0.4% and France’s CAC 40 lost 0.43%.

Automobiles fell 2.3%, and oil and gas stocks lost 0.74%.

– Sophie Kiderlin

British inflation will fall to 2.3% in April, approaching the Bank of England’s target

British inflation fell to 2.3% in April, the Office for National Statistics said on Wednesday, moving closer to the Bank of England’s target rate, even as expectations fell short.

Headlines fell from 3.2% in March, but economists polled by Reuters had expected a steeper decline to 2.1%.

Core inflation, which excludes energy, food, alcohol and tobacco, fell to 3.9% in April from 4.2% in March.

Read the full story here.

– Jenni Reid

CNBC Pro: These six other chip stocks tend to move based on Nvidia’s earnings

Six AI-related stocks worldwide have consistently responded positively Nvidia‘s quarterly results, according to CNBC Pro research.

The analysis anticipates Nvidia’s results for the first quarter of this year, which will be published on Wednesday after the stock markets close.

Five six stocks have risen between 6% and 33% each in the past after Nvidia announced huge profits.

CNBC Pro subscribers can read more about the six stocks here.

– Ganesh Rao

CNBC Pro: Morgan Stanley’s Slimmon names tech stocks to buy at a ‘reasonable price.’

Morgan Stanley Investment Management’s Andrew Slimmon is consistently bullish on stocks, even during periods of volatility.

While he fears a change in market conditions could lead to “some kind of equity correction,” the senior portfolio manager believes equities are in “clear sailing” for now.

“I think it makes sense to be a bit more defensive in the summer, but it’s too early for that,” he said. “Stick to a balance between growth and value names.”

He names four stocks to buy.

CNBC Pro subscribers can read more here.

– Weizhen Tan

European markets: here are the opening calls

European markets are expected to open lower on Tuesday.

That of Great Britain FTSE 100 The index is expected to open 43 points lower at 8,381, Germany’s DAX a drop of 60 points to 18,708, that of France CAC 33 points lower at 8,139 and that of Italy FTSE MIB fell 140 points to 34,788, according to IG data.

Revenue comes from Kingfisher, Smiths Group, Fresnillo and Generali. The eurozone’s trade balance and construction figures for March are known.

– Holly Ellyatt

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