European equities retreated on Tuesday after Eurostat figures revealed consumer prices in the Eurozone climbed to 2.1% last month, nudging above the European Central Bank’s 2% target for the first time since April. The rise was driven largely by higher costs for food, alcohol, and tobacco.
The euro held steady as traders bet the ECB is likely to maintain its current policy stance at its September 11 meeting. Attention also shifted across the Atlantic, with investors awaiting upcoming U.S. jobs data for clues on the Federal Reserve’s next move.
Germany’s DAX Index fell 1.9%, erasing Monday’s 0.6% gain, as the nation’s 30-year bond yield surged to its highest level in 14 years, mirroring a jump in U.S. Treasury yields.
In France, the CAC 40 dropped 0.6% ahead of next Monday’s pivotal parliamentary confidence vote on the government’s austerity plan. The outcome could reshape the political landscape, with risks ranging from delayed budget measures to snap elections.
The U.K.’s FTSE 100 slipped 0.7%, pressured by rising debt worries after the 30-year gilt yield hit 5.680% in early trading—its highest in 27 years—posing an early challenge for Chancellor Rachel Reeves ahead of the budget.
On the corporate front, Centrica (LSE:CNA), the owner of British Gas, moved lower after extending the operating life of two U.K. nuclear plants in which it holds a 20% stake.
Budget airline Wizz Air (LSE:WIZZ) also fell despite posting an 11.4% year-on-year increase in August passenger numbers.
BASF (TG:BAS) traded lower after renewing a long-term supply contract for cathode active materials from its Schwarzheide plant.
Nestlé (LSE:0RR6) shares slipped as the Swiss food giant announced the dismissal of CEO Laurent Freixe following revelations of a personal relationship with an employee.
In contrast, DEUTZ (TG:DEZ) surged after agreeing to acquire Sobek Group, a company specializing in drone propulsion technology.
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