Christine Lagarde European Central Bank President: The FTSE 100 is pushing higher as traders await the latest inflation figures from the EU. Photo: Johanna Geron/Reuters

The FTSE 100 and European stocks were off to a good start this Wednesday, as investors await the latest EU inflation figures and Jerome Powell’s speech.

The FTSE 100 (^FTSE) rose 0.48% to 7,548 at the open, while the CAC (^FCHI) in Paris advanced 0.50% to 6,702 points. In Germany, the DAX (^GDAXI) gained 0.64% to 14,446.

“In terms of global performance, the FTSE 100 continues to punch above its weight, as investors seek the cover of an established index driven largely by mature companies with an element of defensiveness. The strength of the US dollar has improved earnings numbers on repatriation, there is an average dividend yield of 3.7% and some overseas buying interest has left the premier index ahead by 2.3% in the year to date. In early exchanges, broker upgrades lifted the likes of Melrose (MRO.L), Rolls-Royce (RR.L) and BAE Systems (BA.L),” Richard Hunter, head of markets at Interactive Investor, said.

Read more: Food prices up over 12% in November as consumers face a bleak winter

“The same cannot be said of the FTSE 250, however, where a decline of 18% so far this year is a reflection of the parlous state of the UK economy at present. This index has failed to capture the attention of investors, given its domestic focus, with any immediate positive catalysts few and far between,” he added.

Luxury handbag maker Mulberry (MUL.L) swung to a half-year loss as it revealed sales plunged by 10% across the UK as the economic uncertainty and cost-of-living crisis knocked shopper confidence. Shares were down 19.3%.

Today’s inflation reading for the eurozone is expected to show a figure of 10.4%, down from 10.6% the previous month but in line with expectations for the European Central Bank to hike rates by at least 0.5% next month.

Meanwhile, Brent crude (BZ=F) has climbed to $83/barrel, as analysts bid on hopes for a loosening of Chinese restrictions which could lead to renewed demand.

S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the green as trade began in Europe.



In Asia, Tokyo’s Nikkei 225 (^N225) slumped 0.21% to finish at 27,968 while the Hang Seng (^HSI) in Hong Kong gained 2.05% to 18,578. The Shanghai Composite (000001.SS) closed flat at 3,151 points.

On Wall Street, stocks closed mostly in the red ahead of Jerome Powell’s speech at a Brookings Institution event this Wednesday. The US Federal Reserve chair is expected to speak about the outlook for the US economy and the labour market.

Read more: Bank of England blindsided by ‘extraordinary’ mini-budget, Andrew Bailey says

Hargreaves Lansdown senior analyst Susannah Streeter said: “Although super-sized rate hikes appear to be in the rear-view mirror, an increase of 0.5% is still expected in December with the tightening cycle considered to be far from complete.

“The big worry among central bankers is that if economic pain isn’t inflicted now, inflation will be much harder to tame over the longer term.”

The Dow Jones (^DJI) closed flat at 33,852. The S&P 500 (^GSPC) lost 0.16% and finished at 3,957 points and the tech-heavy Nasdaq (^IXIC) fell 0.59% to 10,983.

Watch: What is a recession and how do we spot one?
A country enters a recession typically when gross domestic product (GDP) has declined for two consecutive quarters. 
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During a recession, the economy is struggling, people are losing work, companies make fewer sales, and the country’s overall economic output declines.
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