European shares decline at the open

European shares fell at the open on Wednesday after higher-than-expected US inflation data boosted expectations of a bigger interest rate hike at the Federal Reserve next week. Still, a rally in retail stocks led by Spain’s Inditex limited losses.

The pan-European STOXX 600 index was down 0.3 percent by 0714 GMT, and the technology sector index was down 0.4 percent. The banking sector index rose 0.1 percent.

Tuesday’s data revealed that US consumer prices rose more than expected in August, and the Federal Reserve is expected to raise interest rates by 75 basis points for a third time next Wednesday.

The retail index jumped 2.3 percent, with the sector gaining the most, after shares in Inditex, the Spanish owner of the Zara brand, rose 5 percent. The Spanish index rose 0.3 percent and was among the few bullish indices in Europe.

Inditex reported a 24.5 percent jump in six-month sales and year-on-year earnings to end July on a strong note, before clothing demand began to weaken last month due to rising inflation.