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U.K. Inflation Data Seen Swaying European Stock Market Sentiment

stockmarkets dec18 19oct22 lt

European stock markets are expected to respond to the U.K.'s inflation readings for September due to be released before market hours. The sentiment boost provided by U.K.'s turnaround on fiscal measures and the expectations of strong corporate earnings would however temper the lingering fears of persistent inflation and forceful action by central banks.

The annual inflation is seen rising to 10 percent, from 9.9 percent earlier whereas the core inflation is expected to increase to 6.4 percent from 6.3 percent. The final reading for inflation in the Euro Area in September would also be known later in the day.

On Tuesday, European markets had finished on a positive note, led by Germany's DAX which surged 0.92 percent. Switzerland's SMI strengthened 0.76 percent, followed by France's CAC 40 which added 0.44 percent and the pan-European Stoxx 600 which edged up 0.34 percent. Gains at U.K.'s FTSE 100 were more modest at 0.24 percent. Relief from the reversal of U.K.'s recent fiscal measures and strong earnings boosted sentiment across the region.

The Wall Street had also closed with gains on Tuesday amidst strong earnings updates. Nasdaq Composite added 0.90 percent to close at 10,772.40 whereas the Dow Jones Industrial Average rallied 1.12 percent to finish trading at 30,523.80.

The FTSE 100 Futures (Dec) is trading 0.58 percent higher. The DAX Futures (Dec) is trading 0.74 percent higher. The CAC 40 Futures (Nov) had closed 0.73 percent lower on Tuesday.

U.S. Dollar Index, which measures the strength of the Dollar against a basket of six currencies hovered close to the flatline and is currently at 112.18. The EUR/USD pair has weakened 0.12 percent to 0.9840, while the GBP/USD pair has edged up 0.04 percent to 1.1322.

Gold Futures for December settlement declined 0.2 percent to trade at $1,652.55 per troy ounce, versus $1,655.8 on Tuesday, amidst renewed fears over the Fed's aggressiveness.

WTI Crude Futures for December settlement is trading at $82.92, an uptick of 1.04 percent whereas Brent Crude Futures for December settlement is trading at $90.52, up 0.54 percent from the previous close. Supply concerns have triggered the surge.

American stock futures point to positive trends, with the US 30 (DJIA) index up 0.53 percent and US500 (S&P 500) up 0.75 percent.

Asian markets are trading mixed. Japan's Nikkei 225 and India's Nifty 50 have rallied close to 0.5 percent. New Zealand's NZX 50 has added 0.44 percent whereas Australia's S&P ASX 200 is trading 0.3 percent higher. On the other hand, South Korea's KOSPI has edged down 0.2 percent while China's Shanghai Composite is trading more than half percent lower. Losses at Hong Kong's Hang Seng is more than one percent.

Major earnings updates due are from Sartorius Stedim Biotech (STDM), Antofagasta (ANTO), Klepierre (LOIM), Hargreaves Lansdown (HRGV), Spectris (SXS), Just Eat Takeaway (JETJ), Man Group (EMG) and Rathbone Brothers (RAT).

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