LONDON ( The Deal) -- Major European stock indices recovered on Tuesday but Russian markets lost ground after an unexpected 6.5 percentage-point rate rise by Russia's central bank that failed to stem the slide in the ruble.
The Central Bank of the Russian Federation acted last night after increasing rates last week by one percentage point. The Micex index was down 1.84% at 1,398.82 by early afternoon in Moscow after the ruble tumbled about 10% to touch a record low of about 64 against the dollar. Oil producer Rosneft was down 3.7%, hit by the double whammy of the rate rise and declining oil prices. Shares in companies from elsewhere in Europe that do a lot of business in Russia fell. Austria's Raiffeisen Bank International, which focuses on central and eastern Europe, including Russia, lost 3.4%.
In London, the FTSE 100 was up 0.89% at 6,237.77. In Frankfurt, the DAX gained 0.74% to 9,403.08. The CAC 40 in Paris edged up 0.47% to 4,024.08.
In the U.K., November consumer price data from the Office for National Statistics showed the pace of inflation has eased to a below-forecast 1%, a 12-year-low, from 1.3% in October, driven down by falling fuel prices. The decrease reduces the likelihood that the Bank of England will lift rates from their historic low 0.5% anytime soon.
In Germany, the ZEW institute's index of investor and analyst sentiment showed market protagonists' view of the German situation improved significantly this month from November but their verdict on the eurozone economic situation deteriorated.