European stocks edge up to close at a record high

The pan-European STOXX 600 inched up 0.1%, underpinned by firmer utilities and healthcare

European stocks edged up to end at a record high on Wednesday helped by gains in defensive sectors, while shares of the world's second-biggest listed fashion retailer H&M saw their strongest day in almost nine months on upbeat quarterly results.

The pan-European STOXX 600 inched up 0.1%, underpinned by firmer utilities and healthcare.

Sweden's H&M was among top performers, soaring 15.2% after the retailer reported a stronger than expected first-quarter operating profit, as new CEO Daniel Erver said shoppers liked the brand's spring collections.

The wider retail sector ended up 2.5%.

We had a nice set of figures from H&M and it shows that maybe they are fighting off those cheaper competitors more effectively and have taken quite a chunk out of the European market, according to Chris Beauchamp, chief market analyst at IG Group.

The benchmark index is eyeing a second consecutive quarterly gain, with a 6.8% gain so far. Dovish signals from major central banks and a rally in technology stocks powered by AI fervour have spurred STOXX 600 to record highs.

The main thing that really seems to come through with investors is the fact that, yes, European markets are sitting at record highs, but they are still not as expensive as U.S. counterparts, Beauchamp said.

In focus later in the week will be U.S. February personal consumption expenditure (PCE) data, that could offer clues on the timing for the Fed's first interest rate cut.

In the meantime, ECB board member Piero Cipollone said the European Central Bank was increasingly confident inflation will fall back to its 2% target by mid-2025 as wage growth moderates.

Sweden's central bank held its key rate unchanged at 4.00% as expected and said that inflation pressures had now eased enough for the policy rate to be reduced in the coming months.