European Stocks Drop as UK Inflation, Eurozone Industrial Production Jump
European stock markets closed lower on Wednesday as investors digested UK annual inflation data.
The Stoxx Europe 600 dropped 0.8% and the German DAX closed down 0.7%, while the French CAC 40 and the Swiss Market Index fell 1% each. The FTSE 100 Index in the UK was down 0.3%, outperforming on gains in the energy and mining sectors.
The UK’s consumer price index was up 3.2% year-over-year in August, up from a 2% annual gain in the prior month, driven by higher food and transportation costs, official data showed. That exceeded market expectations for a 2.9% annual increase. On a monthly basis, consumer prices jumped 0.7% in August, surpassing expectations for a 0.5% increase. Consumer prices had been flat in July.
The UK House price Index showed home prices increased 8% in the year to July, while dropping 3.7% from the prior month. The annual gain stood at 13.1% in June.
The UK’s Financial Conduct Authority said it is exploring changes in regulations and compensation schemes to reduce consumer investments in scams or high-risk products. The regulator will also invest 11 million British pounds ($15.2 million) in a campaign to inform consumers about investment risks. By 2025, the watchdog aims to cut in half the number of consumers investing in higher-risk products and to reduce consumer losses to scams.
The eurozone’s seasonally adjusted industrial production jumped 1.5% in July compared with June, Eurostat reported, beating the expected 0.6%. Industrial production was up 7.7% year-over-year in July, compared with market expectations for a gain of 6.3%.
On the corporate front, Darktrace (DARK.L) was up nearly 9% even after it reported a wider loss for the financial year ended June 30 after recording $107.2 million in noncash finance costs related to the issuance of convertible loan notes .
Net loss attributable to equity shareholders totaled $149.6 million, or $0.29 per share, compared with a loss of $28.7 million, or $0.054 per share, in the year-ago period. Revenue, however, climbed to $281.3 million from $199.1 million, driven by the cybersecurity company’s growing customer base.