European shares rise on earnings support; US inflation data in focus

FE Team | Published: March 12, 2024 23:49:31

European shares moved higher on Tuesday, bolstered by upbeat corporate updates and strength in miners, while investors awaited key US inflation data for clues on the interest rate cut trajectory, reports Reuters.
The pan-European STOXX 600, opens new tab was up 0.4 per cent by 8:55 GMT, just shy of the record peak it touched last week. Basic resources, opens new tab shares led sectoral gains with a 1.0 per cent jump.
Later in the day, market action will be dominated by US consumer price index (CPI) report for February, due at 1230 GMT, as it could offer insights into the timing of Federal Reserve's first interest rate cut.
"If you think about the breakdown of the subcomponents of inflation, services have been drifting lower, but at too slow of a pace and remained the most substantial contributor to over inflation," said Gene Salerno, chief investment officer at SG Kleinwort Hambros.
Salerno said it was a good time to invest on equities, based on indications that industrial activity was poised for a recovery.
Traders are pricing in three to four quarter-point (25 bps) US rate cuts, with an over 70 per cent chance of the first one coming in June.
The European Central Bank also looks set to initiate rate cuts in June after recent slowdown in inflation in the euro zone.
Data showed German inflation eased in February to 2.7 per cent, as expected. The country's benchmark DAX, opens new tab up 0.3 per cent.
Shares in Wacker Chemie, opens new tab climbed 7.4 per cent to the top of STOXX 600 after the chemicals maker forecast first-quarter outlook above market estimates, driven by a stronger order intake especially in silicones business.
The broader chemicals, opens new tab index added 0.4 per cent.
Italy's Leonardo, opens new tab rose 4.8 per cent after the defence firm laid out plans to invest in artificial intelligence and other technologies over the next five years.
Frankfurt-listed shares of Oracle climbed 6.4 per cent after the US company beat estimates for quarterly profit and said it was set to make a joint announcement with chip-giant Nvidia, opens new tab.
British homebuilder Persimmon, opens new tab fell 4.0 per cent to the bottom of the STOXX 600 after missing profit expectations and warning of subdued market conditions through 2024.
TAG Immobilien, opens new tab shares dropped 2.1 per cent after the landlord swung to a loss in 2023 amid the German property crisis and announced it would suspend paying dividend.