At 13:40 GMT, the pan European Stoxx 600 index was up 1.2% to 439.37. The U.K.'s FTSE 100 index added 0.4% to 7,583.55. France's CAC40 index advanced 2% to 6,753.57. Germany's DAX index added 1.8% to 14,439.56. Switzerland's Swiss Market index added 1.2% to 11,110.91.
French inflation unexpectedly fell in December, according to provisional data on Wednesday, with the EU-harmonized annual inflation rate dropping to 6.7% during the month, down from 7.1% in November, continuing the positive news from neighbouring Germany earlier this week.
Additionally, Eurozone business activity contracted less than initially thought at the end of last year as price pressures eased, with the region's final composite Purchasing Managers' Index rising to 49.3 in December from November's 47.8.
These numbers suggest the European Central Bank could pause its monetary tightening earlier than previously expected, potentially contributing to the Eurozone's recession not being as deep as expected.
China's finance minister pledged to step up fiscal expansion this year, days after the central bank said it would implement prudent monetary policy to support an economy hurt by the COVID-19 disruptions.
ECONOMIC NEWS: Eurozone Services PMI Rise To 49.8 In December--The seasonally adjusted S&P Global Eurozone Composite PMI Output Index registered in sub-50.0 contraction territory for a sixth consecutive month in December, signalling a sustained downturn in economic activity across the euro area. That said, at 49.3, which was up from 47.8 in November, the latest survey data signalled the slowest decline since last July, when activity levels first started shrinking.
The eurozone economy remained mired in a downturn at the end of 2022, although there were signs that weakness was dissipating as private sector business activity shrank only marginally and at the softest pace since last July. Alleviating pressure on the euro area economy was a further marked easing of inflation, leading to a slower fall in order books and another uptick in business confidence. Manufacturing was once again the principal drag on overall output during December, although services activity also continued to fall.
The S&P Global Eurozone Services PMI Business Activity Index rose to 49.8 in December. This was up from 48.5 in November and signalled only a marginal decline in service sector output across the euro area. Overall, this was the softest decrease in activity since last August. A sixth successive monthly reduction in new business was registered in December. Falling export orders also contributed to this. Outstanding business volumes fell for a second successive month as reduced new business enabled companies to focus on orders pending completion. Input prices and output charges both rose markedly in December, although rates of inflation eased to 11- and four month lows respectively. Finally, business confidence edged up to a four-month peak but remained historically subdued.
Germany Services PMI At 49.2 In December --Germany's services firms reported a slower decrease in business activity in December, latest PMI survey data from S&P Global showed, in a further sign of the downturn in the eurozone's largest economy easing. Price pressures meanwhile remained elevated but retreated further from their recent peaks. Business confidence improved for a third successive month, though expectations nevertheless remained subdued by historical standards amid ongoing headwinds to demand and heightened risks to the economic outlook.
The seasonally adjusted headline S&P Global Germany Services PMI Business Activity Index - which is based on responses to a single question asking about changes in the volume of business activity compared with one month previously - rose notably from November's 46.1 to 49.2 in December. Although registering below the 50.0 no-change mark for a sixth successive month, the latest reading pointed to only a modest rate of contraction that was the slowest since last July.
The S&P Global Germany Composite PMI Output Index ticked up for the second month running in December, registering 49.0 from November's 46.3. The latest reading was the highest in the current six-month sequence of contraction and reflected slower declines in both manufacturing and services. New orders continued to exhibit a weaker trend than output, falling particularly sharply in manufacturing, but likewise showed a slower overall rate of contraction. Latest data signalled a broad-based upturn in business expectations, indicating a sustained rebound from the September-October lows. Led by easing manufacturing price pressures, there were further slowdowns in the rates of input cost and output charge inflation to 20- and 12-month lows respectively. Lastly, December saw another modest rise in private sector employment.
Germany Import Price Inflation Eases To 14.5% In November--Import price inflation eased sharply to 14.5 percent in November from 23.5 percent in October. Despite the overall slowdown, the increase in import prices was again driven by energy prices. Energy imports were 37.9 percent higher than in November 2021. Excluding energy prices, import prices gained 9.7 percent from the last year but decreased 0.7 percent compared to October.
On a monthly basis, import prices declined for the third consecutive month in November. Import prices decreased 4.5 percent after falling 1.2 percent. Export price inflation also slowed in November, but at a much moderate pace to 11.6 percent in November from 13.1 percent. Month-on-month, export prices slid 0.5 percent, following a 1.9 percent drop.
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