Stocks seen higher after euro zone inflation data

The DAX stock index curve sits on a display screen above a toy model bull at the Frankfurt Stock Exchange, operated by Deutsche Boerse AG, in Frankfurt, Germany.

Krisztian Bocsi | Bloomberg | Getty Images

European stocks are set to open in positive territory on Wednesday, despite shock data out of the euro zone showing inflation turned negative last month.

Britain’s FTSE 100 is seen climbing 40 points to 5,892, Germany’s DAX is up 54 points at 13,015 and France’s CAC up by 24 points at 4,959, according to IG index data.

Market players in Europe continue to digest economic data in the region. On Tuesday, a flash reading showed that annual headline inflation in the euro zone is expected to come in at -0.2% in August, down from 0.4% in July.

Meanwhile, core inflation — which strips off volatile items such as energy prices — sank to 0.4% year on year in August from 1.2% in July, the lowest reading since records began in 2001.

The figures pile pressure on the European Central Bank to take further action to contain the impact of the coronavirus pandemic, according to analysts. The euro zone’s central bank is due to update its inflation estimates in September.

Asia Pacific stocks rose despite data showing Australia’s economy officially had officially slid into a recession. Australian gross domestic product fell 7% in the June quarter, the “largest quarterly fall on record,” according to the Australian Bureau of Statistics. That followed a 0.3% fall in the previous quarter.

In corporate news, Unilever said on Wednesday it would spend 1 billion euros ($1.2 billion) to eliminate fossil fuels from its cleaning products by 2030. The move is aimed at cutting down on carbon emissions created by the chemicals used in making the products, according to Reuters.

On the earnings front, French spirits maker Pernod Ricard said it would take a 1 billion euro impairment charge for the full financial year due to the shutdown of bars and restaurants by the coronavirus pandemic. The firm reported a 13.7% drop in profit to 2.26 billion euros in the year ended June 30.

As for data, German retail sales figures fell unexpectedly in July, by 0.9%, according to calendar-adjusted data from the Federal Statistics Office. That missed expectations for a 0.5% increase.

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