Europe midday: DAX hits record high as investors eye US PCE

29th Feb 2024 11:59

(Sharecast News) - European markets were higher on Thursday as investors digested another dump of corporate earnings and looked ahead to inflation data in the US and Europe, while German shares hit record highs in the morning session.

The Stoxx 600 index was up 0.15% to 495.31 in early deals with all major markets higher. The US personal consumption expenditures index - the US Federal Reserve's preferred measure of inflation - will be keenly watched for how it impacts the path of projected interest rate cuts this year.

German's DAX index climbed 0.52% to 17,692 to touch a record high after preliminary readings showed inflation fell in six states in February.

"Broad-based gains for Asian equities overnight ahead of the US inflation report fed through to a more positive session for Europe at the open ahead of some key inflation data later. Wall Street closed lower on the session as fourth-quarter US GDP annualised growth was revised down from 3.3% to 3.2%," said Finalto analyst Neil Wilson.

"Yesterday saw more divergence in Europe as the DAX added a quarter of a percent, whilst the FTSE 100 declined by three-quarters of a percent."

"US PCE inflation is the key data point today and has the potential to move market expectations. Core PCE is set to rise 0.4% month on month and 2.8% year on year in January. Slowing disinflation should help push out bets for rate cuts beyond May more firmly...quite frankly I find it hard to buy into a May cut anymore."

In equity news, consumer healthcare group Haleon surged after forecasting a rise in sales this year.

Ocado gained after swinging back to an underlying profit in 2023 as its joint venture with M&S returned to profit.

Budweiser owner AB InBev, the world's biggest brewer, fell after narrowly missing full-year profit and revenue forecasts.

German chipmaking tools manufacturer Aixtron slumped by almost 18% despite forecasting further revenue growth for 2024, driven by growing in demand for its new products used in the production of compound semiconductors.

Reporting by Frank Prenesti for Sharecast.com