European shares close higher on signs of cooling US inflation

European shares rose on Thursday (11), after a sharp rise in the previous session with signs of cooling in inflation in the United States, while Aegon rose after the Dutch insurer raised its forecast for the full year.

The pan-European STOXX 600 index closed up 0.06% at 440.16 points after marking its best session in nearly two weeks on Wednesday, amid bets that a higher U.S. inflation reading moderate-than-expected will encourage the Federal Reserve to become less aggressive on interest rate hikes.

“Even if European equities are not rallying like some of their counterparts today, they are rising because the markets’ interpretation is that the inflation numbers were synonymous with the Fed changing its monetary policy,” said Sebastian Paris-Horvitz, chief executive officer. of research at La Banque Postale Asset Management.

Money markets are pricing in just over a 60% chance that the Fed will adopt a 50 basis point rate hike at next month’s meeting.

The STOXX 600 is down about 10% so far this year, compared with a decline of more than 11% for Wall Street’s S&P 500 index. US stocks are heavily reliant on movements in big tech stocks, which fell sharply in the first half of the year on concerns about rising interest rates.

Among stocks, Aegon jumped 8.9% after raising forecasts for full-year operating capital generation and free cash flow between 2021 and 2023. Zurich Insurance Group also gained 1.7% as it reported a gain better-than-expected earnings in the first half.

• In London, the Financial Times index dropped 0.55%, to 7,465.91 points;
• In Frankfurt, the DAX index fell 0.05% to 13,694.51 points;
• In Paris, the CAC-40 index gained 0.33% to 6,544.67 points;
• In Milan, the Ftse/Mib index appreciated by 0.69%, at 22,858.18 points;
• In Madrid, the Ibex-35 index registered an increase of 0.33%, to 8,380.00 points;
• In Lisbon, the PSI20 index rose by 0.47%, to 6,239.25 points.