European stocks fall to one-month low amid surging US inflation

European stocks fall: European shares nosedived to a one-month low on Wednesday, driven by losses in real estate and financial sectors, following a surge in US consumer inflation data that dashed hopes for imminent interest rate cuts.

The latest figures revealed that US consumer prices surged more than anticipated in March, fuelled by escalating costs of gasoline and housing. This pushed back projections for the US Federal Reserve's inaugural interest rate cut from June to September.

The pan-European STOXX 600 index witnessed a 0.6 per cent decline by 1315 GMT, with real estate and financial services sectors experiencing respective drops of 0.8 per cent and 1.9 per cent, sensitive to interest rate changes.

Key indices in major European economies including Germany, France, Italy, and Spain slipped between 0.5 per cent and 1.1 per cent.

Neil Birrell, chief investment officer at Premier Miton Diversified Funds, commented, "With rate cut expectations being pushed further out over recent weeks, today's CPI data will offer little hope for those anticipating positive news on that front."

The technology sector also faced pressure, declining by 0.8 per cent due to a surge in Euro zone bond yields.

Despite the broader downturn, Barry Callebaut witnessed a notable surge of 9.6 per cent, marking its best day in sixteen years, following upbeat half-yearly revenue boosted by rising cocoa prices.

Looking ahead, focus turns to the European Central Bank's upcoming monetary policy meeting, with traders anticipating an 80 per cent likelihood of unchanged rates.

In company news, Koninklijke Philips initially saw gains but later rose by 0.3 per cent after reaching an agreement with the US government regarding the sale of its new sleep apnea machines.

Meanwhile, Italgas slipped by 1.8 per cent after making a preliminary offer for its main domestic rival 2i Rete Gas, valued at 4-5 billion euros.

In Norway, the benchmark index saw a 0.8 per cent increase after core inflation rates fell below expectations in March, supporting the view of declining interest rates later this year.

(With Reuters inputs)