Key Points:
- European stocks edged higher on positive earnings and moderate U.S. inflation figures.
- Several companies reported significant gains, including CRH, NN Group, Subsea 7, Moncler, and Universal Music Group.
- Amadeus faced a decline after reports of competition for payments processor Shift4 Payments.
- Grifols and Aixtron experienced substantial losses due to declining profits and forecasts below expectations.
European stocks displayed resilience on Thursday, propelled by positive earnings reports and in-line U.S. inflation figures. Germany’s benchmark index, the DAX, touched a new record high, boosted by preliminary data indicating a slowdown in inflation for the euro zone’s largest economy.
The pan-European STOXX 600 closed 0.1% higher, with notable contributions from the insurance and construction & material sectors, both advancing over 1%. Last week, the STOXX 600 reached a record high, fueled by robust earnings and a surge in technology stocks following Nvidia’s impressive forecast.
Germany’s DAX climbed 0.4% to achieve an all-time high after data revealed a moderation in inflation to 2.7% in February due to cheaper energy prices. Preliminary inflation readings from France and Spain hinted at a further dip in euro zone inflation, reinforcing the possibility of European Central Bank rate cuts in the coming months.
The overall trend suggests that eurozone inflation, anticipated on Friday, will slow down to around 2.5% in February from January’s 2.8%, inching closer to the ECB’s 2% target. Additional positive sentiment stemmed from U.S. data indicating the smallest annual price increase in three years, maintaining the possibility of a mid-year Federal Reserve rate cut.
Several companies reported noteworthy gains, including CRH, an Ireland-based building materials producer, which surged 6% after surpassing its 2023 targets and expressing optimism about future profit growth. NN Group (AMS:NN), an insurer, saw an 8.1% climb following the announcement of higher-than-expected 2023 operating capital generation and elevated 2025 targets.
Norwegian offshore service provider Subsea 7 (OTCMKTS:SUBCY) advanced 5.19%, proposing shareholder returns of $1 billion over four years while reporting better-than-expected fourth-quarter earnings. Italian luxury group Moncler (BIT:MONC) experienced a 4.98% gain after surpassing sales expectations, and Universal Music Group rose by 4.9% following new savings targets and a fourth-quarter sales beat.
Conversely, Amadeus dropped 7.3% due to reported competition between Fiserv and the Spanish travel booking group for payments processor Shift4 Payments. Grifols (BME:GRF), a pharmaceutical company, plummeted 34.9% following a 72% decline in 2023 profit. Aixtron (ETR:AIXA), a German semiconductor tools maker, lost 18.7% after forecasting a 2024 margin below expectations and a client’s unexpected cancellation of one of its major contracts.
