European stock markets ended higher on Tuesday as investors considered a mix of economic indicators and comments from European Central Bank officials regarding inflation and interest rates.
The pan-European Stoxx 600 increased by 0.48% to close at 636.63. Germany’s DAX rose 0.77% to 25,449.19, while the UK’s FTSE 100 gained 0.42% to reach 10,541.69.
France’s CAC 40 advanced 0.40% to 7,865.07. Italy’s FTSE MIB recorded the strongest increase among the major European markets, climbing 0.87% to 51,261.40. Spain’s IBEX 35 also rose 0.75% to 19,444.20.
German factory orders dropped 10.6% month-on-month in August after a revised 3.2% increase in July, according to official data. The sharp decline was mainly linked to a reversal in large orders for aircraft, ships, trains and military equipment. Excluding major orders, new orders declined only 0.1%.
Eurozone retail sales increased 0.1% in August after a 0.6% decline in July, Eurostat reported. Retail sales were also 0.8% higher than a year earlier. Non-food sales rose 0.5%, while automotive fuel sales fell 1.9%. Across the wider EU, retail activity increased 0.1% monthly and 1.2% annually.
France’s manufacturing production recovered by 0.3% in August following a 0.8% decline in July. However, overall industrial output fell 0.3% after contracting 0.6% in the previous month.
Bank of Finland Governor Olli Rehn warned that a prolonged conflict in the Middle East could push energy prices higher and eventually increase costs across other goods, services and wages.
Rehn said these broader effects had not yet become evident. He also noted that higher long-term borrowing costs were weighing on economic growth and reducing the impact of energy prices on wider inflation.
The ECB policymaker said the central bank would continue assessing interest-rate decisions on a meeting-by-meeting basis while closely monitoring incoming economic data and heightened uncertainty.
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