European stocks shrugged off a mid-session setback and closed higher on Tuesday, as investors reacted to some positive economic data from the U.S. and Europe, and looked ahead to crucial inflation readings from the U.S. and U.K., due later in the week.
The pan European Stoxx 600 climbed 0.52%. The U.K.s FTSE 100 gained 0.3%, Germanys DAX ended 0.48% up, and Frances CAC 40 advanced 0.35%, while Switzerlands SMI closed with a gain of 0.46%.
Among other markets in Europe, Belgium, Denmark, Finland, Greece, Iceland, Netherlands, Portugal, Russia, Spain, Sweden and Turkiye closed higher.
Poland ended weak, while Austria and Norway settled flat.
In the UK market, Admiral Group, Persimmon, Sainsbury (J), Severn Trent, United Utilities, BAE Systems, ICG, Standard Chartered, GSK, Phoenix Group Holdings, Unite Group, Londonmetric Property, Berkeley Group Holdings, Next, 3i Group, AstraZeneca, JD Sports Fashion, Vistry Group, IHG and Legal & General gained 1 to 2.2%.
Just Group soared nearly 15% after the provider of retirement-income products and services posted a robust set of first-half results and upgraded its 2024 guidance.
Antofagasta dropped about 2.2%. Marks & Spencer ended 1.75% down, and Glencore closed lower by about 1.2%.
British automotive supplier Dowlais ended down 3.5% after widening its pre-tax loss for the first half of the year and cutting its annual revenue outlook.
In the German market, Puma rallied 3.7% and Fresenius Medical Care climbed 2.35%. Siemens Energy, Hannover Rueck, Fresenius, MTU Aero Engines, Henkel, Siemens, SAP and Qiagen gained 1 to 2%.
Meal-kit maker HelloFresh skyrocketed more than 19% after its second-quarter results beat estimates.
Sartorius, Commerzbank, Volkswagen, Beiersdorf and Covestro lost 0.6 to 1.2%.
In the French market, Edenred ended more than 3% up. Schneider Electric gained nearly 2% and Sanofi climbed 1.5%. Hermes International, Capgemini, Kering, Orange and Essilor also posted notable gains.
Valneva zoomed 7.8%. The French biotech company has reaffirmed its annual revenue outlook after reporting a turnaround to net profit for the first half.
ArcelorMittal ended down 1.65%. Stellantis, Michelin and TotalEnergies lost 0.5 to 1%.
On the economic front, the UK unemployment rate dropped to 4.2% in the three months to June period, data from the Office for National Statistics revealed. The rate was expected to rise marginally to 4.5% from 4.4% in the preceding period.
Average earnings excluding bonus climbed 5.4% in the three months to June from the previous year, slower than the 5.8% rise in the prior period, the Office for National Statistics said. This was the weakest growth since mid-2022 but the growth rate was stronger than economists forecast of 4.6%.
The slower-than-expected deceleration in the UK wage growth supports the case for gradual interest rate cuts by the Bank of England later this year after a quarter-point reduction early this month.
German economic sentiment deteriorated in August on ambiguous monetary policy, disappointing data from the US economy and escalating conflicts in the Middle East, survey results from the think tank ZEW showed. The ZEW Indicator of Economic Sentiment declined sharply by 22.6 points to 19.2 from 41.8 in July. The last time expectations deteriorated in a similar manner was July 2022.
In U.S. economic news, a Labor Department report said its producer price index for final demand inched up by 0.1% in July after rising by 0.2% in June. The uptick by producer prices matched economist estimates.
Meanwhile, the report said the annual rate of producer price growth slowed to 2.2% in July from an upwardly revised 2.7% in June. Economists had expected the annual rate of producer price growth to decelerate to 2.3% from the 2.6% originally reported for the previous month.
The notable slowdown by the annual rate of price growth has increased confidence the Federal Reserve will lower interest rates at its monetary policy meeting next month.