European stock markets started were mixed on Tuesday as UK grocery inflation fell to 16.5%, its lowest level this year.
In London, the FTSE 100 (^FTSE) was trading marginally higher by noon trade, while the CAC (^FCHI) tumbled 0.3% in Paris, and the Frankfurt DAX (^GDAXI) was 0.6% lower.
According to Kantar data released this morning, grocery prices dropped in the four weeks to 11 June – a fall from the 17.2% recorded a month ago, and below the record 17.5% recorded in March.
“A slight wobble on Wall Street last night caused a bit of a hangover on Asian and European markets, but the damage looks relatively minor,” Russ Mould, investment director at AJ Bell, said.
“The FTSE 100 dipped at the market open but soon clawed back all of its losses as investors piled into tobacco and pharmaceutical companies – defensive industries which theoretically see consistent demand whether economic conditions are good or bad.
“The rest of the week could be more challenging for UK stocks with inflation figures out tomorrow, followed by the next UK interest rate decision on Thursday. A rate hike to 4.75% looks highly likely.
“There was no shortage of drama among London-listed stocks big and small, with takeovers, stake building, profit warnings and legal threats among the key themes.”
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