European markets advance, building on Wednesday's rally

LONDON — European markets nudged higher on Thursday as investors adjust their monetary policy expectations after a cooler-than-expected U.S. inflation print.

The pan-European Stoxx 600 added 0.4% in early trade, with construction and material stocks climbing 1% to lead gains while basic resources dropped 0.7%.

The European blue chip index closed 1% higher on Wednesday on the back of a late rally as new data showed U.S. consumer prices rose 8.5% annually in July, slowing from the previous month in large part due to a drop in oil prices. Economists had expected an 8.7% annual climb.

The easing of inflation will inform the U.S. Federal Reserve's monetary tightening trajectory ahead of its September meeting.

Shares in Asia-Pacific climbed overnight following rallies in Europe and on Wall Street. Hong Kong's tech-heavy Hang Seng index led gains as the tech sector benefited from the prospect of less aggressive interest rate hikes.

U.S. stock futures ticked higher in early premarket trade as Wall Street looks to build on a surge that took the S&P 500 to its highest point since early May.

It was another bumper day for corporate earnings in Europe, with Siemens, Thyssenkrupp, Bilfinger, Novozymes, Rabobank, Zurich Insurance, M&G, Deutsche Telekom and Aegon among the major companies reporting before the bell.

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