Markets make gains after US inflation data increases below expectations

Global markets had a lift on Thursday after US inflation data came in softer than expected and provided more positivity regarding interest rates. US inflation struck 3.2% in July against the same month a year earlier, rising from 3% in June to break a run of 12 consecutive slowdowns, but traders welcomed the figure as it was not as high as feared. Elsewhere, shares in luxury firms, such as Burberry , were buoyed by the Chinese government easing rules for tourists from the country to travel in groups. The FTSE 100 moved 0.41%, or 31.3 points, higher to finish at 7,618.6. Germany’s Dax index was 0.91% higher for the day and the Cac 40 closed up 1.52%. A second consecutive benign set of inflation prints adds to optimism that the Fed rate hike cycle is at an end and a soft landing is achievable for the US economy Stateside, the main US markets bolted higher amid hopes the inflation reading will point towards a pause in interest rate increases. James Knightley, chief international economist at ING , said: ‘A second consecutive benign set of inflation prints adds to optimism that the Fed rate hike cycle is at an end and a soft landing is achievable for the US economy. ‘We continue to have our concerns about the economic outlook, centred on the abrupt hard stop in credit growth, but the Fed will soon be in a position to be able to cut rates if a recession materialises.’ Meanwhile, sterling edged higher against the dollar as it benefited from the US currency being weakened by reduced interest rate expectations. The pound was up 0.03% to 1.272 US dollars and was 0.29% lower at 1.155 euros at market close in London. In company news, housebuilder Persimmon moved higher as it told shareholders that its average selling price for new houses has risen despite a challenging market backdrop. However, the group also disclosed a nearly 30% fall in revenue to £1.2 billion as it sold considerably fewer houses during the first six months of the year, while profits fell by about two-thirds. Nevertheless, shares in Persimmon closed 25p higher at 1,148.5p. However, elsewhere in the property industry, Savills’ shares dropped after profits plunged in the face of higher borrowing costs. The company had hoped to be boosted by a recovery in the Chinese property market but told investors on Thursday this was ‘somewhat slower’ than expected. As a result, the company saw its shares decline by 106.5p to 885p. Regional newspaper group National World closed in the green after it indicated it could be interested in buying the Daily Telegraph and Sunday Telegraph following speculation the papers could be put up for sale later this year. National World shares finished up 0.1p at 17.85p after it said it ‘will consider participating in a sale process’ if owners Lloyds decide to sell Telegraph Media Group. The price of oil retreated slightly after rising to nine-month highs earlier in the week on the back of optimism about increased demand. A barrel of Brent crude oil fell by 0.85% to 86.81 US dollars at the time markets were closing in London. The biggest risers in the FTSE 100 were Burberry, up 61p at 2,257p, Hiscox, up 29p at 1,075p, Croda International, up 152p at 5,640p, Flutter, up 355p at 14,750p, and Haleon, up 7.5p at 336.15p. The biggest fallers in the index were Rio Tinto, down 162p at 4,793p, Spirax-Sarco, down 255p at 10,580p, Fresnillo, down 9.8p at 539.6p, Antofagasta, down 24.5p at 1,582.5p, and NatWest, down 2.9p at 235.5p.