By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- Stocks in Europe extended gains Tuesday
after a key report showed inflation in the eurozone falling to a
multiyear low.
Underscoring persistently low inflation in the region, Eurostat
said consumer prices in September were 0.3% higher than in
September of last year, marking the lowest annual rate of inflation
since October 2009.
The data may put more pressure on the European Central Bank to
launch full-scale quantitative easing. The ECB, which meets
Thursday, has already enacted a series of measures aimed at
stimulating economic growth and inflation, but inflation remains
well below the bank's goal of just under 2%. Most analysts say the
bank, led by President Mario Draghi, on Thursday will, however,
likely focus more on details of its "private" QE program, which
includes purchases of asset-backed securities and covered
bonds.
Investors have already sifted through a mixed round of data on
Tuesday. German unemployment in September rose unexpectedly,
indicating softening in the labor market in Europe's largest
economy. From France, consumer spending rose in August, a rebound
from July, but a decline in producer prices in August accelerated
to a rate of 0.3%.
In Italy, the unemployment rate fell to 12.3% in August from
12.6% in July, but the rate of youth unemployment climbed to a
record high.
Markets: The Stoxx Europe 600 was up 0.5%, bumping up from a
0.2% gain ahead of the inflation report. The index is on track for
a 0.2% rise in September and a 0.3% increase for the third
quarter.
The euro (EURUSD) bought $1.2626, down from $1.2663 after the
inflation report. The shared currency bought $1.2694 late Monday in
New York.
Also after the euro inflation report, Germany's DAX 30 rose 0.4%
and France's CAC 40 gained 0.7%. Italy's FTSE MIB surged by
0.9%.
Among the session's best price performers, shares of Royal Bank
of Scotland climbed 3.6% after the bank said losses from bad loans
in 2014 are likely to be "significantly lower" than the GBP1
billion ($1.6 billion) that it had anticipated.
The U.K.'s FTSE 100 was fractionally higher, with a profit
warning from retailer Next PLC weighing on its shares.
A report from Office for National Statistics said the U.K.
economy expanded 0.9% in the second quarter compared with the
first, higher than a previous estimate of 0.8% growth
quarter-on-quarter.
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