European shares edge up on earnings relief; German DAX at record high
By Ankika Biswas and Khushi Singh
(Reuters) -European stocks climbed on Thursday as investors took comfort in upbeat earnings and an in-line U.S. 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% higher, led by a more than 1% 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 (NASDAQ:NVDA)'s blowout forecast. The flagship index also logged its fourth consecutive monthly gain.
The German DAX climbed 0.4% to a fresh all-time high after data showed cheaper energy prices slowed inflation down to 2.7% 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% and 0.7% 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%,» 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% in February from 2.8% January, moving closer to the ECB's 2% target.
Also boosting sentiment were data showing the annual increase in U.S. prices was the smallest in three years, keeping the prospects of a mid-year Federal Reserve rate cut
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