A shopping street in Steglitz district, Berlin, Germany.
LONDON — European stocks kicked off October trading in positive territory as investors parsed fresh inflation data from the euro zone.
The pan-European Stoxx 600 was slightly higher, up 0.17%, by 10:08 a.m. London time, with sectors and major bourses diverged. Tech stocks added 1.14%, while oil and gas shed 0.99%.
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Shares of German chemicals group Covestro rose to the top of the European benchmark, up 3.5%, after Abu Dhabi's national oil company Adnoc agreed to acquire it for 14.7 billion euros ($16.3 billion). Meanwhile, British bakery chain Greggs fell 3.96%, as sales growth showed signs of cooling.
Renault shares also fell to the bottom of France's CAC 40, down 3.6%, extending auto sector losses recorded in the previous session amid growing industry pressures and heightened competition from China.
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The wobbly start to October comes after European stocks closed lower on Monday, with almost all sectors and major bourses in negative territory.
Euro zone inflation fell below 2% for the first time since mid-2021, preliminary data showed Tuesday, likely boosting the chances of another interest rate cut from the European Central Bank. Inflation for the 20-country bloc fell to 1.8% in September, less than the 1.9% forecast by economists and below the 2.2% recorded in August, according to Eurostat.
The regional reading comes after preliminary harmonized German inflation data released on Monday showed the country's consumer price index eased to 1.8% in September, down from 2% in August. The reading had been forecast to come in at 1.9%, according to a Reuters poll of economists.
Money Report
Last week, preliminary data showed the harmonized inflation rate in both France and Spain also plunged below the ECB's 2% target in September.
U.S. stock futures were little changed on Monday evening, after the S&P 500 closed at a record to end September.
Investors also reacted to comments by Federal Reserve Chair Jerome Powell who said on Monday that the central bank is "not on any preset course" when it comes to the next steps for rate policy. He said to expect two more cuts this year — that is, a quarter percentage point each — if the economy performs as anticipated.
Asia-Pacific markets traded mixed overnight; some Asian markets are closed for a public holiday Tuesday, namely, South Korea, Hong Kong and mainland China. Mainland China will be closed for the rest of the week for the Golden Week holiday.
