Investing.com - European equity indices edged lower Wednesday, as investors digested the apparent failure of UKraine peace talks as well as hotter-than-expected U.K. inflation.
At 03:02 ET (07:02 GMT), the DAX index in Germany dropped 0.2%, the CAC 40 in France slipped 0.3% and the FTSE 100 in the U.K. fell 0.2%.
Chance of peace in Ukraine slipping
U.S. President Donald Trump held a phone call with Russian President Vladimir Putin on Tuesday, but the conversation yielded no progress in ending to the war in Ukraine.
In a two-hour conversation, the U.S. president dropped his earlier insistence on an unconditional 30-day ceasefire–a proposal backed by Ukraine–that he hoped would kickstart peace talks to end the over three-year conflict.
"I suspect he assessed his negotiating position incorrectly," Germany’s defence minister Boris Pistorius said, "Putin is clearly playing for time. Unfortunately, we have to say Putin is not really interested in peace."
This is another blow to Kyiv, coming less than three months after Trump’s public falling out with Ukrainian President Volodymyr Zelenskiy.
The European Union is currently working on its next package of sanctions against Russia.
U.K. inflation surged in April
The main economic data release in Europe came from the U.K. earlier Wednesday, with British inflation surging by more than expected in April.
The annual rate of consumer price growth leapt to 3.5% in April from 2.6% in March, the Office for National Statistics said, the highest reading since January 2024 and the largest increase in the rate since 2022 when inflation was rocketing.
The data are likely to further diminish expectations in financial markets that interest rates will be cut more than once by the end of 2025.
M&S faces hefty hit from cyberattack
The U.K. retail sector is in focus Wednesday, with Marks and Spencer (LON: MKS ) warning investors it is facing a £300 million hit to trading profits as a result of last month’s ransomware attack.
The 141-year-old retailer warned the disruption may last for months, with its online channels remaining down for payments.
British sportswear retailer JD Sports Fashion (LON: JD ) posted a 2% fall in underlying sales for its first quarter, in line with its expectations for volatile trading and amid uncertainty over the impact of tariffs.
Electric services company Elia (EBR: ELI ) reaffirmed its 2025 earnings forecast, following the completion of a €2.2 billion equity raise and continued progress on grid infrastructure projects.
Crude surges on Iran strike reports
Oil prices surged higher Wednesday following reports Israel is preparing a strike on Iranian nuclear facilities, raising fears supply could be hit from this key Middle East producing region.
At 03:02 ET, Brent futures soared 1.2% to $66.17 a barrel, and U.S. West Texas Intermediate crude futures rose 1.3% to $62.86 a barrel.
Israel is preparing for a potential military strike on Iranian nuclear facilities, as the U.S. continues to pursue a diplomatic agreement with Tehran, CNN reported on Tuesday, citing multiple U.S. officials familiar with recent intelligence.
The report said that the Israeli leaders have not made a final decision yet, but the likelihood of an Israeli strike has "gone up significantly" in recent months.
Additionally, U.S. crude stockpiles increased by approximately 2.5 million barrels for the week ending May 16, according to data from the American Petroleum Institute on Tuesday, defying forecasts for a 1.9 million-barrel draw.
