(Bloomberg) -- European equities edged higher as data showed US inflation matched expectations, bolstering wagers on a Federal Reserve rate cut next week.
The Stoxx Europe 600 Index gained 0.3% by the close. Media stocks led the gains with Publicis Groupe SA and RTL Group SA shares rising after JPMorgan Chase & Co. upgraded both stocks to overweight. Retail was the biggest drag on the benchmark as Spain’s Inditex SA fell after reporting slower sales growth ahead of the crucial holiday shopping season.
Figures showed US consumer prices rose at a firm pace in November that was in line with expectations, solidifying expectations for the Federal Reserve to cut interest rates next week. Swaps traders have now nearly fully priced in a 25-basis-point reduction.
Amelie Derambure, a senior multi-asset portfolio manager at Amundi, said the report was “clearly good news because the market was concerned about the final steps of the disinflation trend and this data is in line.”
Meanwhile, China’s two-day Central Economic Work Conference will map out the country’s policies for next year. A strong stimulus package could serve as a meaningful catalyst for European stocks exposed to the world’s second biggest economy.
Investors will be eager to “see the glass half-full when it comes to stimulus measures,” said Christopher Dembik, senior investment adviser at Pictet Asset Management. “I’m quite skeptical about this, at best there will be a short term bounce but there are no structural changes ahead in China,” he added.
For more on equity markets:
- Inflation Matters More Than Market Shows: Taking Stock
- M&A Watch Europe: Zalando To Buy About You, Anima, Orsted, CVC
- Ashtead US Listing Plan Is Latest Setback for London: ECM Watch
- US Stock Futures Little Changed; Stitch Fix, Figs Gain
- Ashtead Heads Stateside: The London Rush
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--With assistance from Michael Msika.
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