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Investing.com - European stock markets moved lower on Tuesday, with investors parsing through key regional inflation numbers and eyeing an abrupt leadership shake-up at food giant Nestle.
The pan-European Stoxx 600 index declined 1.5%, while the Dax in Germany plunged by 2.2% and the FTSE 100 in the U.K. slipped by 0.9%. France’s CAC 40 fell 0.7%.
The food and beverage sector was among the biggest laggards, weighed down by a 0.9% decline in Switzerland-listed shares in Nestle. CEO Laurent Freixe was ousted from the post on Monday in the wake of a board meeting to discuss the findings of an investigation into an undisclosed romantic relationship with a subordinate that violated the firm’s code of conduct.
Freixe is being replaced by Philipp Navratil, a veteran company insider who headed its Nespresso coffee division, with immediate effect, Nestle said.
The change may present fresh headwinds to a business already grappling with several years of muted sales volumes and share price declines, as well as the dismissal of former CEO Mark Schneider a year ago. Long-time Chair Paul Bulcke has also said he will step down in 2026.
Investors were also assessing data which showed that Eurozone consumer price growth accelerated marginally in August. However, the figure remained close to the European Central Bank’s 2% target level, possibly bolstering the case for a relatively benign inflation picture that could persuade policymakers to keep interest rates unchanged following a period of rapid cuts to borrowing costs.
According to a flash estimate from Eurostat, the headline consumer price index in the twelve months to August came in at 2.1%, rising from 2.0% in July but still in line with expectations.
"The small increase in headline inflation [...] makes little difference for policymakers at the ECB who look certain to leave interest rates unchanged at next week’s meeting and probably for several months beyond that," analysts at Capital Economics said in a note.
They flagged that inflation in the services sector, a crucial section of the Eurozone economy that is closely-monitored by the ECB, "came down a touch" from 3.2% in July to 3.1% in August. It was the lowest rate of services inflation since March 2022 and "should provide some reassurance for policymakers that domestic" price pressures are continuing to subside, the analysts said.
Underlying "core" CPI, meanwhile, ticked up to 2.3%. The gauge, which strips out volatile items like food and fuel, matched July’s pace and was slightly faster than the 2.2% level projected by economists.
The ECB’s upcoming meeting is slated to take place on September 11, with officials anticipated to keep rates on hold. Still, expectations for the months ahead differ, as some analysts see the potential for a possible cut near the end of the 2025 or early next year to help keep inflation from consistently undershooting 2%.
Elsewhere, in individual stocks, Kering’s shares jumped after HSBC lifted its rating of the Gucci parent to "buy" from "hold." Partners Group also rose following the unveiling of its first-half earnings.