European stock markets gained on Wednesday juxtaposed to the record high eurozone inflation of 5.1 percent. The FTSE 100 closed 0.8 higher and the CAC gained about 0.4 percent amid worries of potential conflict in the eastern part of Europe diminished.
The consumer price index rose by 5 percent in December while the figure was 5.1 percent in January, reveals data of Eurostat, the European Union's statistics office.
Meanwhile, the European Central Bank has shrugged off the inflation and said the rise is just temporary. The Bank's inflation target was less than half of the current inflation and many economists expected it to be at 4.4 percent.
Aegon Asset Management head of rates in the UK, Sandra Holdsworth, said the unemployment is at a record low and the economic growth prospects this year look good.
The UK price annual inflation is at a record high in past nine years. The British Retail Consortium (BRC) revealed a 1.5 percent acceleration in January and the rate is highest since December 2012. The acceleration was 0.8 percent in December 2021 and the rise was basically due to food prices.
Meanwhile, the markets will be watching the inflation and economists are forecasting it would drop to 4.4 percent in the annual rate.
CMC Markets UK chief market analyst Michael Hewson said even though the bank is making an argument that inflationary pressure is transitory, but it is not of the sort if the US experience is considered. He added further that the inflation is more than 20 percent in Spain, Italy and Germany.
The S&P 500 rose 0.1 percent while the DJI edged 0.1 percent lower. The Nasdaq dropped 0.3 percent. The US firms' job cut was 301,000 in January due to the spread of the Omicron variant.
Economists believed 200,000 jobs would have been created as the employment gains were 776,000 in December. The hardest hits were the hospitality and leisure industries. These two alone lost 154,000 jobs. A cut of 62,000 was witnessed in the transportation, utilities and trade sectors. A decline of 23,000 was further seen in other services category. About 27,000 jobs were cut in the goods production including manufacturing, construction, mining and natural resources.
The Asian markets performed upward. Nikkei pushed up 1.7 percent and Hang Seng climbed 1.1 percent. However, the Hong Kong and the Shanghai Composite dropped 1 percent.
The oil prices edged lower and the US crude stocks declined by 1.6 million barrels last week and it was more than what was expected. The OPEC and allies confirmed to be maintaining the 400,000 barrels adding rate a day in February.