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European markets open higher after a day of sales

UK inflation slowed to 2% in July, from 2.5% in June, according to the latest data from the Office of National Statistics (ONS). Photo: Getty

European markets opened in the green on Wednesday morning in London and made subdued moves after a stronger than expected drop in consumer price index numbers in the UK.

The FTSE 100 (^ FTSE) rose 0.2% shortly after the opening bell after a red closing price on Tuesday. In Europe, the DAX (^ GDAXI) and CAC (^ FCHI) recorded smaller increases of 0.1%.

UK inflation slowed to 2% in July, from 2.5% in June, according to the latest data from the Office of National Statistics (ONS).

“Inflation kicked off the accelerator in July, but that doesn’t mean we’re set for a smooth ride as it owes a huge amount to an artificial price spike a year earlier,” said Sarah Coles, personal financial analyst at Hargreaves Lansdown.

“The underlying price pressure, particularly from rising gasoline and used car prices, means that it could pick up speed again soon and could reach 4% by the end of the year.”

US stock futures also made small moves after a five-day winning streak ended.

S&P 500 futures (ES = F) lost 0.1%, the Dow (YM = F) appeared to open 0.2% lower and Nasdaq futures (NQ = F) fell 0.1%.

“Bargain hunters have provided some support after yesterday’s massive sell-off,” said Naeem Aslam, senior market analyst at AvaTrade. “The stock markets fell the most in the last 30 days yesterday.”

Continue reading: UK inflation temporarily slows to 2%

In Asia, indices rebounded overnight from a sell-off earlier in the week triggered by Chinese data that fell short of expectations.

The Hang Seng (^ HSI) closed 0.4% higher, the SSE Composite (000001.SS) rose 1.1% and the Nikkei (^ N225) rose 0.6%.

“The sell-off in Chinese stocks and weak US retail numbers are also not helping. It is likely that the gains we are seeing for the US and Europe today will not last long,” Aslam said.

The story goes on

The upside came when the New Zealand central bank left interest rates unchanged.

Watch: what is inflation and why is it important?

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