The continent-wide Stoxx 600 ended up 0.3%, recovering from a two-week intraday low
European stocks gained Wednesday after a softer-than-expected US services sector data, while investors also evaluated softening eurozone inflation data that firmed the case for ECB interest rate cuts.
The continent-wide Stoxx 600 ended up 0.3%, recovering from a two-week intraday low. The index has been hitting record highs, with hopes of rate cuts this year and optimism around artificial intelligence buoying sentiment over the past two quarters.
Barclays raised its year-end target for the benchmark index to 540 from 510, turning bullish on the wider region on bets on dropping borrowing costs, cheaper valuations and improving domestic growth.
Banks topped sectoral gainers, adding 1.4% to reach their highest level since early 2018, while eurozone banks also advanced 1.5%.
An Institute for Supply Management (ISM) survey showed US services industry growth slowed further in March, while a measure of prices paid by businesses for inputs declined to a four-year low, boding well for inflation outlook.
Another set showed eurozone inflation dropped unexpectedly last month.
It appears too early to conclude that the last mile of the disinflation process has been successfully conquered, HSBC economists wrote.
Nonetheless, while one swallow might not make a spring, it certainly helps open the door to an ECB rate cut, they added.
Following the data, ECB policymaker Pablo Hernandez de Cos told a financial event in Barcelona that rate cuts could come in June.
While the ECB is expected to leave rates unchanged at its policy meeting next week, markets see a 71% probability of a 25 bps rate cut in June.
As for other sectors, technology gained 0.9%. A powerful earthquake in Taiwan raised concerns about disruptions to the vital chip-making industry, which had spearheaded much of the global rally in the earlier quarter.
