European stocks rise on support of fall in UK inflation data

European stocks were flat on Wednesday as investors digested better-than-expected economic data from the UK, higher corporate earnings and a weaker-than-expected Chinese economy.
At 03:45 ET (07:45 GMT), the German DAX was up 0.2% and the French CAC 40 was up 0.0%.
3%, the UK’s FTSE 100 has changed little.

Latest European business figures UK
While annual inflation fell from 7.9 percent to 6.8 percent in July compared to the previous month, the main reason for the decline was the falling gas and electricity prices, while food prices also decreased.

While surprisingly good news for the BoE, it keeps inflation more than three times above its 2% average target.

Also on Tuesday, data showed that basic wages rose 7.5% in the UK.
Growth hit a record 8% in June, adding to the longer-term economic impact even after 14 flat rates.

The euro area will also release important data, first quarter GDP data is expected to show weak growth of 0.2% and manufacturing data will be negative.

The business climate was hit by new business signs in China earlier in the day. China is the world’s second largest economy and the main driver of growth in the region, as well as an important market for many of Europe’s largest companies.

The price of new homes in China fell for the first time this year in June, putting pressure on the country’s real estate sector, according to data released overnight.
This comes after China’s retail sales and manufacturing output rose less-than-expected in July, and last week’s data showed both the world’s largest economy fell into recession in July.

Meanwhile, US retail sales rose in July, pointing to the possibility of further increases in inflation and a negative outlook for interest rates in the global economy.

European banks, credit rating agency Fitch’s JPMorgan Chase & Co.
The mining industry is also struggling with the effects of the weak Chinese economy, as China is an important source of demand.

Shares in Aviva (LON:AV) rose 1.9% after the insurer maintained its earnings target after a 58% increase in health insurance sales, as customers elsewhere sought alternatives to long NHS waiting lists.

British car and home insurer Admiral (LON: ADML) reported an increase in its first half preliminary earnings and a profit increase of approximately 7%. Still, the company cut its dividend by 15% as it warned “against the risk of high demand inflation”.

Oil prices rebounded on Wednesday after falling earlier in the session as traders weighed concerns about the weak Chinese economy against a larger-than-expected decline in US American products.

Oil inventories fell 6.2 million barrels more than expected last week, with official data from the Energy Regulatory Commission to be confirmed later Wednesday.

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