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European stocks rise after weak US services data and falling euro zone inflation

European stocks closed higher on Wednesday following weaker-than-expected data from the US services sector, while investors also took stock of lower inflation in the euro zone which strengthened the case for cutting rates. interest on the part of the European Central Bank.

The STOXX 600 index closed 0.3% higher, recovering from a two-week intraday low. The index has reached record highs, with expectations of interest rate cuts this year and optimism about artificial intelligence boosting sentiment over the past two quarters.

Banks led the sector gains, rising 1.4% to reach their highest level since early 2018, while eurozone banks also gained 1.5%.

Research from the Institute for Supply Management showed that US service sector growth slowed further in March, while a measure of the prices companies paid for inputs fell to a four-year low, making hope for companies’ inflation prospects.

Other data showed euro zone inflation fell unexpectedly last month.

“It seems too early to conclude that the last mile of the disinflation process has been successfully achieved,” the HSBC economists wrote.

“However, even if one swallow does not make a summer, it certainly helps open the door to a rate cut by the ECB.”

While the ECB is expected to leave rates unchanged at next week’s policy meeting, markets see a 71% chance of a 25 basis point cut in June.

IN LONDON, the Financial Times index advanced by 0.03%, to 7,937.44 points.

IN FRANKFURT the DAX index rose by 0.46%, to 18,367.72 points.

IN PARIS, the CAC-40 index gained 0.29%, to 8,153.23 points.

IN MILAN the Ftse/Mib index grew by 0.45%, to 34,480.87 points.

In MADRID, the Ibex-35 index recorded an increase of 0.52%, to 11,032.30 points.

IN LISBON, the PSI20 index depreciated by 0.05%, to 6,304.03 points.

Source: Terra

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