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Europe's STOXX 600 hits record high in strong start to March

Published 03/01/2024, 03:27 AM
Updated 03/01/2024, 12:22 PM
© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, February 29, 2024. REUTERS/Staff/File Photo

By Ankika Biswas and Khushi Singh

(Reuters) -Europe's benchmark index hit a new record high on Friday propelled by rate-sensitive stocks, with investors continuing to cheer upbeat corporate earnings while looking past data that showed core prices remained stubbornly high.

The pan-European STOXX 600 closed 0.6% up at an all-time high, logging its sixth straight weekly gain.

Germany's DAX climbed 0.3%, also scaling a fresh record high, emerging as the best performer among its top regional peers so far in 2024.

Rate-sensitive real estate and technology led sectoral gains, with an over 1% jump each, while energy too gained on the back of a 2% advance in oil prices ahead of an OPEC+ decision on supply agreements. [O/R]

On the earnings front, Daimler (OTC:MBGAF) Truck raised its dividend after posting better-than-expected pre-tax 2023 earnings, sending its shares surging 18.1% after predicting 2024 earnings well above analyst forecasts.

The STOXX 600 briefly took a hit after data showed euro zone inflation dipped last month but underlying price growth proved to be sticky. Another data set showed manufacturing activity continued to contract last month, although firms were optimistic about the year ahead, underscoring some economic concerns.

"Core inflation is proving a lot stickier than we thought... we now struggle to see the ECB cutting rates in April and moving our call to June," Pantheon Macroeconomics analysts noted.

The inflation figure also prompted Goldman Sachs to push back its ECB rate-cut forecast to June from April.

The data comes a day after U.S. prices logged their smallest annual increase in three years, keeping mid-year Federal Reserve rate cut prospects alive and boosting global market sentiment.

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Among other major movers, Grifols jumped 18.4% after the Spanish drug maker released a new 2024 cash flow target.

British broadcaster ITV (LON:ITV) climbed 14.3% after selling its 50% stake in streaming service BritBox International to its joint venture partner BBC Studios for 255 million pounds ($322 million).

On the flip side, Kuehne+Nagel slumped 13.5% after the Swiss logistics group posted a 49% drop in annual operating profit and said it expected the Red Sea crisis to impact coming quarters.

Saint Gobain (EPA:SGOB) lost 3.7% after difficult market conditions dragged the French construction materials group's 2023 annual sales down.

Volkswagen (ETR:VOWG_p) dropped 4.9% after forecast sales growth would slow in 2024, while Ocado (LON:OCDO) shed 6.9% as brokerages trimmed the British online supermarket stock's target price after Thursday's results.

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