By Shristi Achar A and Johann M Cherian
(Reuters) – European stocks rose to close at a record high on Wednesday, helped by gains in defensive sectors, while shares of the world’s second-largest listed fashion retailer, H&M (ST:), recorded their strongest day in almost nine months on a positive quarterly basis. results.
The pan-European index rose 0.1%, supported by stronger utilities and healthcare.
Sweden’s H&M was among the top performers, rising 15.2% after the retailer reported stronger-than-expected first-quarter operating profit, as new CEO Daniel Erver said shoppers enjoyed the spring collections of the brand name.
The overall retail sector closed up 2.5%.
“We’ve had a nice set of data from (H&M) and it shows that perhaps they are fighting cheaper competitors more effectively and have taken a nice chunk of the European market,” said Chris Beauchamp, chief market analyst at IG Group.
The benchmark index is forecast for a second consecutive quarterly rise, with a gain of 6.8% so far. Accommodative signals from major central banks and a rally in tech stocks fueled by AI fervor pushed the STOXX 600 to record highs.
“The main thing that really seems to stand out among investors is the fact that, yes, European markets are at all-time highs, but they are still not as expensive as their US counterparts,” Beauchamp added.
Throughout the week we will focus on February US personal consumption expenditure data, which may offer clues to the timing of the Federal Reserve’s first interest rate cut.
Meanwhile, ECB board member Piero Cipollone said the European Central Bank is increasingly confident that inflation will return to its 2% target by mid-2025 as wage growth moderates.
Sweden’s central bank kept its key rate unchanged at 4.00% as expected and said inflationary pressures had eased enough to allow a policy rate cut in the coming months.
Deutsche Bank rose 2.7% to a six-year high after Morgan Stanley upgraded the German bank to “overweight.” The stock was among the best performers in the 40 index, which closed up 0.5%.
Ratings agency Standard & Poor’s cut SBB’s credit rating to selective default from CCC+, adding that the Swedish owner was selectively defaulting on part of its debt, sending shares of the troubled group down 4.0 %.
DS Smith jumped 10.2% after the British paper and packaging company said it was in talks with International Paper over an all-share offer worth 5.72 billion pounds (7.22 billion dollars).
European markets will be closed on Friday and Monday for the Easter holidays.