European Shares Rise on Benign Inflation Data and Insurer Gains

European shares experienced a rise on Thursday, driven by mild inflation data, solidifying bets on a U.S. rate cut in September and gains in the insurance sector, notably Admiral. The STOXX 600 index saw a 0.2% increase, with broader market optimism as investors awaited further economic data.

European shares rose on Thursday, powered by benign inflation data, which bolstered optimism around a potential U.S. rate cut in September. Gains in insurer Admiral further added to the positive market sentiment.

The pan-European STOXX 600 index climbed 0.2%, nearing a two-week high and marking a third session of gains. The insurance sector saw a 0.5% rise, led by Admiral's impressive 6.7% increase in stock price following a remarkable 32% jump in first-half pre-tax profit.

Soft U.S. inflation numbers this week have heightened expectations of a rate cut by the Federal Reserve, the first in over four years. Investors are now speculating on the size of the rate reduction—whether it will be a substantial 50-basis-point cut or a standard 25 bps decrease. In other sectors, tech stocks rebounded with a 0.5% rise, while the FTSE 100 remained flat. Among individual stocks, Adyen saw a 6.3% gain post solid profit reports, while Orsted and Geberit lagged.