European Shares Advance On Growth Optimism

European stocks gained ground to hit a one-month high on Wednesday as Federal Reserve Chair Jerome Powell’s upbeat economic view bolstered investor confidence in the world’s largest economy.

In testimony before the Senate Banking Committee, Powell on Tuesday offered a positive outlook of the U.S. economy and reiterated that gradually raising interest rates is “the best way forward.” He also downplayed potential negative fallout from the ongoing U.S.-China trade spat.

The pan-European Stoxx Europe 600 index was up half a percent at 386.77 in late opening deals after rising 0.2 percent in the previous session.

The German DAX was climbing 0.9 percent, France’s CAC 40 index was gaining half a percent and the U.K.’s FTSE 100 was moving up 0.6 percent.

The British pound drifted lower to hit its lowest level in 10 months after U.K. inflation data missed forecasts.

The consumer price index unexpectedly came in flat at 2.4 percent year-over-year versus expectations for a 2.6 percent rise, raising questions over whether the Bank of England will deliver an August rate hike.

Elsewhere, final data from Eurostat showed that Eurozone annual inflation accelerated in June, exceeding the European Central Bank’s target of “below, but close to 2 percent”.

The annual inflation rate rose to 2 percent from 1.9 percent in May, in line with the flash estimate released on June 29.

Novartis climbed 2 percent. The Swiss drug major reiterated its FY18 outlook after reporting a surge in Q2 profit.

Telecommunications equipment company Ericsson soared 9.5 percent after it swung to a modest operating profit and pledged to deliver an operating margin of 10 percent by 2020.

ASML Holding jumped 6 percent as its Q2 profit topped forecasts.

Airline EasyJet rallied 2.2 percent after lifting its FY18 profit view.

On the flip side, Danish lender Danske Bank tumbled nearly 7 percent after warning its 2018 earnings will be at the lower end of its previous guidance.

Electrolux dropped 1.5 percent after its second-quarter net income declined to 517 million Swedish kronor from 1.29 billion kronor in the year-ago quarter, due to provisions related to a French competition probe.

Shares of Smiths Group slumped 8 percent. The British engineering company warned that it expects a 2 percent drop in full-year revenue at its medical division.

Premier Foods tumbled 4 percent after announcing it is considering selling some brands as part of turnaround plans.

Software AG lost 4 percent in Frankfurt. The company confirmed its full-year guidance after reporting a 4 percent rise in second-quarter sales at constant currencies.

by RTTNews Staff Writer

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