European Indices Decline Amid Drop in Defense Stocks and Rising UK Inflation: European stocks opened lower
on Wednesday as defense shares fell due to renewed hopes for a ceasefire in Ukraine,
coinciding with data showing accelerating inflation in Britain.
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Indices
The Stoxx Europe 600 Index fell 0.25% to 556 points, weighed down by a 2.6% drop in aerospace and defense stocks,
marking the index’s first decline since early August.
France’s CAC 40 dropped 0.45% to 7,944 points.
The UK’s FTSE 100 slipped 0.1% to 9,180 points.
Germany’s DAX fell 0.65% to 24,266 points.
Defense stocks declined sharply: Rheinmetall dropped 1.8% and Hensoldt 1.9% in Germany,
while Rolls-Royce and QinetiQ in the UK lost 1.9% and 2%, respectively.
Data from the Office for National Statistics showed UK inflation rose to 3.8% in July,
up from 3.6% in June, exceeding forecasts of 3.7%.
Oil
Oil prices rose during Wednesday trading ahead of US inventory data,
as markets assessed the chances of successful peace talks between Russia and Ukraine.
Brent crude for October delivery gained 0.3% (21 cents) to $66 per barrel.
WTI crude for September delivery rose 0.25% (15 cents) to $62.50 per barrel.
Prices had fallen more than 1% on Tuesday amid optimism about a possible agreement to end the war in Ukraine,
which could ease sanctions on Russia and increase global supply.
Markets now await the US Energy Information Administration’s report later today,
after the American Petroleum Institute reported a 2.4 million-barrel drop in inventories for the week ending August 15.
US Futures
US stock futures recorded limited declines before Wednesday’s open,
As investors awaited Federal Reserve Chair Jerome Powell’s speech on Thursday at the Jackson Hole symposium,
which may address future monetary policy.
The VIX fear index rose to 15.84 points, signaling increased investor caution and weaker risk appetite.
Dow Jones futures slipped 58 points (0.13%) to 44,941 points.
Nasdaq 100 futures fell 0.24% to 23,413.25 points.
S&P 500 futures dropped 0.16% to 6,422.25 points.
European Indices Decline Amid Drop in Defense Stocks and Rising UK Inflation