German stocks hit record high on easing inflation, US data on tap

By Khushi Singh

(Reuters) -European stocks edged higher on Thursday, buoyed by upbeat earnings reports, while German stocks touched fresh records after early readings showed inflation fell in several of the country's economically important states.

The pan-European STOXX 600 index inched up 0.1%, with construction and materials stocks leading the charge among sectors.

CRH climbed 7.1% after the Dublin-based building materials producer forecast core profit growth of 6% to 10% in 2024, while beating the profit target for 2023.

Eiffage added 4.4% after the French construction group reported better-than-expected full-year free cash flow and a "strong" order book.

The German DAX climbed 0.4% to touch a record high after preliminary data showed inflation fell in six economically important German states in February, suggesting inflation is on its downward trajectory.

Investors are awaiting U.S. personal consumption expenditures (PCE) data - the Federal Reserve's preferred inflation measure - for clues on the timeline for U.S. rate cuts.

"Inflation by this measure is expected to show a tick upwards but a larger-than-expected move could cause fresh jitters and concern that monetary easing will be pushed further into the distance," said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

Meanwhile, EU-wide inflation data is slated for release on Friday, with the numbers expected to show headline inflation slowed to 2.5% year-on-year in February from 2.8% in January.

The STOXX 600 hit a record high last week, riding on stronger-than-expected earnings reports and a jump in technology stocks inspired by Nvidia's blowout forecast. The index looks set for its fourth consecutive month of gains.

In other updates, Poste Italiane shares rose 3.1% following a larger-than-expected yearly increase in fourth-quarter operating profit and a boost in dividend payments by more than a fifth from the Italian post office.

Beiersdorf dropped 3% after the Nivea maker forecast growth in organic sales to slow down in 2024, despite an organic sales increase in the past year.

German chipmaking tools manufacturer Aixtron tumbled 14.5% to the bottom of STOXX 600, despite the forecast of further revenue growth for 2024.

(Reporting by Khushi Singh and Sruthi Shankar in Bengaluru; Editing by Sonia Cheema and Anil D'Silva)