LONDON: Europe’s major stock markets rose Wednesday after solid gains elsewhere, with London buoyed by the weak pound as UK inflation dived to a one-year low.
Asian markets climbed following a rally on Wall Street as easing trade and Syria concerns allowed investors to concentrate on earnings and upbeat data, while fresh news on US-North Korea talks also provided support.
“Stocks in Europe are higher… as the global mood starts to improve,” said CMC Markets analyst David Madden.
“There was a strong finish in New York last night and Asia overnight as traders focus more on corporate and economic data.
“While the Syrian conflict and uncertainty surrounding global trade are on hold, investors could remain bullish.”
London’s benchmark FTSE 100 index of major companies was the standout performer in Europe, as official data showed that annual British inflation slowed unexpectedly to 2.5 percent in March from 2.7 percent in February.
The news, which confounded expectations for no change, sent the pound reeling as it undermined the urgency of raising interest rates — although analysts said a hike was still expected in May.
Pundits said the data nevertheless throws into doubt the course of the Bank of England’s monetary policy this year.
“The FTSE 100 has gone from the back of the pack to the market leader, as a sharp deterioration in UK inflation has driven the pound sharply lower, ramping up FTSE gains,” said IG analyst Joshua Mahony.
“The out-performance of the pound has certainly been one of the main determinants of FTSE 100 underperformance among European bourses.”
The weaker pound pushes up share prices of multi-nationals trading on the FTSE.
– Hammerson axes takeover –
In company news, British retail property giant Hammerson on Wednesday scrapped a £3.4-billion ($4.9-billion, 3.9-billion-euro) takeover of rival Intu that would have created a pan-European shopping mall giant, citing a weak UK consumer market.
Investors appeared to welcome Hammerson’s decision, with the group’s share price jumping more than three percent. Intu meanwhile slumped nearly four percent.
Hammerson’s U-turn comes amid difficulties for retailers housing large floor space who are competing also for fast-growing online sales.
– Wall Street rally –
Wall Street provided a strong lead for Asian and European stocks.
All three US main indices posting healthy gains on the back of better-than-expected reports from heavyweights including Netflix, Goldman Sachs and Johnson & Johnson.
Adding to the upbeat sentiment was China’s announcement of a timetable to open up its car market as well as news the country’s central bank had eased depositary requirements for most lenders to boost liquidity for businesses.
The Washington Post also reported that CIA chief Mike Pompeo, Trump’s pick to be secretary of state, made a secret visit to Pyongyang over the first weekend of April and met Kim.