European stocks closed lower on Wednesday, pressured by data indicating a larger-than-expected increase in consumer price inflation in the U.K. for April. This fueled concerns about future interest rates, following hawkish remarks from several Federal Reserve officials suggesting that the U.S. central bank might maintain higher interest rates for a longer period.
According to the Office for National Statistics, U.K. consumer price inflation decreased to its lowest level since July 2021. Consumer prices rose by 2.3% year-on-year in April, compared to a 3.2% increase in March. However, this figure was still above economists' forecasts of a 2.1% rise.
The pan-European Stoxx 600 fell by 0.34%, with the U.K.'s FTSE 100 dropping 0.55%, Germany's DAX declining 0.25%, France's CAC 40 losing 0.61%, and Switzerland's SMI ending 0.36% lower.
Elsewhere in Europe, markets in Austria, Denmark, Greece, the Netherlands, Norway, and Poland also finished weak. In contrast, Belgium, Iceland, Portugal, Russia, and Sweden saw gains, while Finland, Spain, and Turkey closed flat.
In the UK market, Antofagasta plummeted nearly 6.5%. Other notable decliners included Glencore, Ocado Group, Barclays Group, St. James's Place, WPP, Rio Tinto, Barratt Developments, and 3i Group, which saw losses between 2% and 3.4%.
RS Group shares fell after reporting a 25% drop in underlying annual profits. British Land shares eased as the company announced its plan to sell its stake in Sheffield's Meadowhall shopping center for £360 million.
On the other hand, Marks & Spencer surged 5.2% following the announcement of its first dividend since 2019, underpinned by its strongest profit in over a decade. Meanwhile, Smith (DS) and B&M Value Retail fell by 2.6% and 2.5%, respectively, while Auto Trader Group, GSK, Compass Group, ICG, and Diploma posted strong gains.
In Germany, Porsche and Covestro both dipped more than 3%, with Qiagen, Sartorius, Fresenius Medical Care, BMW, Brenntag, BASF, Mercedes-Benz, E.ON, and Adidas declining between 1% and 2.2%. Infineon rose nearly 4%, while Symrise, Merck, Siemens Healthineers, and Vonovia gained between 1% and 2%.
In France, Hermes International and Michelin both shed over 4%. Other losses came from Renault, LVMH, TotalEnergies, Publicis Groupe, Kering, Thales, BNP Paribas, Orange, and Capgemini, which fell between 1% and 2.5%. In contrast, Dassault Systemes rallied nearly 3.5%, STMicroelectronics climbed about 2.75%, and Eurofins Scientific gained nearly 2%. Additionally, L'Oreal, Schneider Electric, Safran, and Sanofi recorded moderate to sharp gains.
