Europe midday: Shares extend gains after EZ inflation data boosts sentiment

European shares extended gains on Wednesday as Eurozone inflation eased more than expected in November.

The pan-European Stoxx 600 index was up 0.42% at 0830 GMT. Sentiment was boosted after headline inflation in the single currency bloc fell to 10% from 10.6% in October, versus expectations of 10.4%. This marked the first decline in 17 months and paves the way for a 50 basis points rate hike by the European Central Bank.

Meanwhile, the core rate was steady at 5.0%, in line with consensus expectations.

The data also showed that energy inflation fell to 34.9% in November from 41.5% the month before, while food, alcohol and tobacco inflation increased to 13.6% from 13.1%.

Asia stocks shrugged off a weak session in the US as hopes of an easing of Covid curbs in China boosted sentiment.

China’s official NBS manufacturing PMI fell the most since April, hitting 48 in November versus 49.2 in October and below expectations for 49 as the country’s zero-Covid policy weighed on factory activity.

Investors will also be eyeing a speech from US Federal Reserve chair Jerome Powell for hints on the pace of rate rises.

In equity news, Pennon shares fell as the UK utility form reported lower interim profits as costs mounted.

SBB shares rose after Brookfield Asset Management said it would buy a 49% stake in the education portfolio of the Swedish real estate company.

Still in Sweden, Avanza bank fell sharply after suggesting the Riksbank’s latest policy rate hike will not have a positive impact on net interest income.

Reporting by Frank Prenesti for Sharecast.com