European markets open to close, U.S. inflation data for June
LONDON — European stocks traded lower on Wednesday morning, extending losses seen in previous sessions this week as investors prepare for the latest inflation data from the United States.
The pan-European Stoxx 600 index was trading 0.5% lower with markets uncertain ahead of the latest inflation reading. All sectors were in negative territory apart from oil and gas and technology stocks.
The June consumer price index is expected to show headline inflation in the U.S., including food and energy, rising above May’s 8.6% level to 8.8%, according to estimates from Dow Jones.
The hot reading expected Wednesday could prompt the Federal Reserve to hike interest rates by another 75 basis points during this month’s meeting. Last month, the Fed raised its benchmark interest rates three-quarters of a percentage point to a range of 1.5%-1.75% in its most aggressive hike since 1994.
The best performer on the Stoxx 600 index was Orion, its stock up 7% after the Finnish drugmaker raised its full year outlook after it signed a collaboration agreement with Merck aimed at developing a drug for prostate cancer.
The worst performer on the index was Sinch, down 6.4%. It’s been a tough week for the Swedish cloud communications company, with the stock declining yesterday after it said its second-quarter profit would be hit after it reassessed the historical cost of goods sold.
U.S. stock futures were little changed in overnight trading on Tuesday as investors awaited the inflation data. In Asia-Pacific markets overnight, shares were higher as China released trade data, and the Bank of Korea and Reserve Bank of New Zealand hiked rates.
Other data out earlier on Wednesday showed the U.K.’s economy expanded unexpectedly in May with output growing by 0.5%, according to the Office for National Statistics. A Reuters poll of economists had anticipated zero growth in May from April.
— CNBC’s Yun Li contributed to this market report.