EUROPEAN stocks climbed on Thursday as investors took comfort in upbeat earnings and an in-line US inflation print, while Germany’s benchmark index touched a record after preliminary data showed slowing inflation in the continent’s top economy.
The pan-European Stoxx 600 closed 0.1 per cent higher, led by a more than 1 per cent advance in the insurance and construction and material sectors.
The Stoxx 600 hit a record high last week, riding on stronger-than-expected earnings reports and a jump in technology stocks inspired by Nvidia’s blowout forecast. The flagship index also logged its fourth consecutive monthly gain.
The German DAX climbed 0.4 per cent to a fresh all-time high after data showed cheaper energy prices slowed inflation down to 2.7 per cent in February.
Other preliminary inflation readings from France and Spain suggested euro zone inflation dipped further, strengthening the case for European Central Bank rate cuts this year, even if data suggest a much slower decline in underlying prices. However, France’s CAC 40 and Spain’s IBEX 35 lost 0.3 per cent and 0.7 per cent respectively.
“The message here is we’re still on the right track, but the road to normalization is likely to be rather long and not going to be a smooth ride … It’s not going to be a linear deceleration back to 2 per cent,” Barclays Private Bank chief market strategist Julien Lafargue said.
The broadly in-line figures indicate euro zone inflation, due on Friday, will show a slowdown to around 2.5 per cent in February from 2.8 per cent in January, moving closer to the ECB’s 2 per cent target.
Also boosting sentiment were data showing the annual increase in US prices was the smallest in three years, keeping the prospects of a mid-year Federal Reserve rate cut alive.
CRH jumped 6 per cent as the Ireland-based building materials producer said it expects more profit growth after beating 2023 targets.
NN Group climbed 8.1 per cent after the insurer announced higher-than-expected 2023 operating capital generation and hiked 2025 targets.
Subsea 7 advanced 5.3 per cent after the Norwegian offshore service provider proposed shareholder returns of US$1 billion over four years, while reporting better-than-expected fourth-quarter earnings.
Italian luxury group Moncler gained 5 per cent following a sales beat, while Universal Music Group rose 4.9 per cent after new savings targets and a fourth-quarter sales beat.
On the flip side, Amadeus dropped 7.3 per cent after Reuters reported Fiserv and the Spanish travel booking group are competing to acquire payments processor Shift4 Payments.
Drugmaker Grifols tanked 34.9 per cent after a 72 per cent plunge in 2023 profit, while German semiconductor tools maker Aixtron lost 18.7 per cent after forecasting a 2024 margin below expectations and a client reported the unexpected cancellation of one of its own major contracts. REUTERS
