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European stocks rise on earnings relief

written by Bella Palmer

The pan-European STOXX 600 closed 0.1% higher, with the insurance and construction sectors leading the gains with over a 1% increase

European stocks rose on Thursday due to positive earnings and stable U.S. inflation data. Germany's main index reached a new high after initial figures revealed a decrease in inflation in the region's largest economy.

The pan-European STOXX 600 closed 0.1% higher, with the insurance and construction sectors leading the gains with over a 1% increase.

Last week, the STOXX 600 hit a record high driven by better-than-expected earnings and a surge in technology stocks influenced by Nvidia's strong forecast.

The German DAX also climbed 0.4% to a fresh all-time high following a report showing that lower energy costs contributed to a slowdown in inflation to 2.7% in February.

Preliminary inflation data from France and Spain indicated a further decline in euro zone inflation, possibly leading to rate cuts by the European Central Bank this year. However, France's CAC 40 and Spain's IBEX 35 decreased by 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 data suggests that euro zone inflation, to be released on Friday, will likely drop to around 2.5% in February from 2.8% in January, moving closer to the ECB's 2% target.

Additionally, reports of the smallest annual increase in U.S. prices in three years kept the possibility of a mid-year Federal Reserve rate cut alive.

CRH surged by 6% after the Ireland-based building materials producer exceeded its 2023 targets and expressed optimism for further profit growth.

NN Group rose by 8.1% following the announcement of higher-than-expected 2023 operating capital generation and raised 2025 targets.

Subsea 7 advanced by 5.3% after proposing shareholder returns of $1 billion over four years and reporting better-than-expected fourth-quarter earnings.

Moncler, the Italian luxury group, gained 5% on surpassing sales expectations, while Universal Music Group increased by 4.9% after revealing new savings goals and a beat in fourth-quarter sales.


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