©Reuters. FILE PHOTO: The DAX chart of the German stock price index is pictured at the stock exchange in Frankfurt, Germany, March 8, 2024. REUTERS/Staff/File Photo
By Khushi Singh
(Reuters) – European shares edged higher on Tuesday, supported by upbeat corporate updates and strength from miners, as investors awaited key U.S. inflation data for clues on the trajectory of the interest rate cut.
The pan-European index rose 0.4% at 8.55am GMT, just shy of a record peak hit last week. Basic resources stocks led sector gains with a jump of 1.0%. [MET/L]
Later in the day, market action will be dominated by the US consumer price index (CPI) report for February, due at 12.30 GMT, as it could offer insights into the timing of the country’s first interest rate cut. of the Federal Reserve.
“If you think about breaking down the subcomponents of inflation, services have trended lower, but at too slow a pace and have remained the most substantial contributor to excessive inflation,” said Gene Salerno, chief investment officer at SG Kleinwort Hambros.
Salerno said it’s a good time to invest in stocks, based on indications that industrial activity is poised for a recovery.
Traders are pricing in US rate cuts of three to four quarter points (25 bps), with a greater than 70% chance of the first occurring in June.
The European Central Bank also appears ready to initiate rate cuts in June following the recent slowdown in inflation in the eurozone.
Data showed German inflation fell in February to 2.7%, as expected. The country’s benchmark grew 0.3%.
Wacker Chemie shares rose 7.4% to the top of the STOXX 600 after the chemicals maker forecast a first-quarter outlook that beat market estimates, driven by higher order intake especially in the silicones sector.
The broader chemicals index gained 0.4%.
Italian shares Leonardo rose 4.8% after the defense company outlined plans to invest in artificial intelligence and other technologies over the next five years.
Frankfurt-listed shares of Oracle (NYSE:) rose 6.4% after the U.S. company beat quarterly profit estimates and said it was poised to make a joint announcement with chip giant Nvidia (NASDAQ:) ).
British house builder Persimmons (LON:) fell 4.0% to the bottom of the STOXX 600 after missing profit expectations and warning of weak market conditions through 2024.
TAG Immobilien shares fell 2.1% after the owner swung to a loss in 2023 due to the German property crisis and announced it would suspend dividend payments.