European stocks drift lower despite UK inflation falling to target

Investing.com – European stock markets edged lower Wednesday despite U.K. inflation falling back to the Bank of England’s target, with activity muted by a U.S. holiday.

At 03:15 ET (07:15 GMT), the in Germany traded 0.2% lower, the in France fell 0.2% and the in the U.K. dropped 0.3%.

UK inflation falls back to target

The U.K rose by 2.0% on an annual basis in the 12 months to May 2024, down from 2.3% in April, and back to the Bank of England’s target for the first time since July 2021.

This adds to the wider global disinflation story, after benign U.S. data last week, and comes ahead of the Bank of England’s latest on interest rates on Thursday.

The central bank is still widely expected to stand pat on rates, with data last week showing British wages picked up more quickly than forecast, but a cut could now be on the horizon.

Nvidia becomes most valuable company

Nvidia (NASDAQ:) leapfrogged Apple (NASDAQ:) and Microsoft (NASDAQ:) to snatch the crown of most valuable company at the close Tuesday as the chipmaker continued to ride AI-wave to new heights. 

Nvidia rose more than 3%, pushing its market cap to $3.34 trillion, surpassing Microsoft’s $3.31 trillion and Apple’s $3.29 trillion, making the chipmaker the most valuable company by market cap.

Elsewhere, Just Eat Takeaway (AS:) stock rose 1.5% after Europe’s biggest food delivery firm said on Wednesday it has struck a deal to offer Amazon (NASDAQ:) Prime members in Germany, Austria and Spain free delivery of food orders above a certain price.

Europe must generate greater political stability

Still, activity is likely to be limited Wednesday with U.S. financial markets closed for the Juneteenth holiday.

Europe must foster greater political stability, cut red tape and reduce energy price volatility to reverse a declining trend in foreign investment, consulting firm EY said on Wednesday based on a survey of business leaders.

Stagnant growth, big swings in energy costs and political uncertainty have all damaged the bloc’s competitiveness, particularly when compared with the U.S..

European markets were hit hard last week after the European Parliament elections saw a swing to the far-right party, prompting French President Emmanuel Macron to call a snap election.  

Crude slips amid demand concerns 

Crude prices edged lower Wednesday, as an unexpected build in inventories raised concerns over demand. 

By 03:15 ET, the U.S. crude futures (WTI) traded 0.3% lower at $80.50 per barrel, while the contract dropped 0.3% to $85.08 per barrel.

U.S. crude stocks rose by 2.26 million barrels in the week ended June 14, according data from the , released late Tuesday. 

Analysts had expected a 2.2 million barrel draw in crude stocks.

Official U.S. inventories from the are due on Thursday, a day later than usual due to the U.S. holiday.