European markets rise as investors await US inflation data

European markets experienced a modest uptick on Wednesday as global investors turned their attention to the impending release of the latest U.S. inflation figures. By 11:40 a.m. London time, the pan-European Stoxx 600 index had risen by 0.3%, with nearly all sectors trading positively. Utilities saw a notable increase of 1%, while the household goods sector faced a decline of 0.8%.

In the banking sector, shares of Dutch bank ABN Amro fell by 6.3% despite the institution reporting a 29% rise in first-quarter net profits. Conversely, Germany’s Commerzbank announced a similarly impressive 29% increase in first-quarter net profit, which boosted its shares by 2.4%.

The luxury goods sector faced challenges as well, with Burberry’s shares dropping by 2.7%. The company warned of a “challenging” outlook for the first half of this year, following a 34% decrease in annual operating profit last year. This sentiment affected other luxury stocks, with Kering’s shares losing 1.5% and LVMH’s shares dipping by 1.3%.

Traders are cautiously optimistic that further rate hikes by the Federal Reserve might be off the table, despite recent inflation data exceeding expectations. On Tuesday, the April producer price index was reported to be higher than economists had forecasted, which has tempered expectations that the Federal Reserve would commence rate cuts later this year.

JPMorgan European Discovery Trust plc (LON:JEDT) is an investment trust company. The Investment Trust JEDT objective is to achieve capital growth from a portfolio of quoted smaller companies in Europe, excluding the United Kingdom.

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