European stocks climb as inflation data eases; Delivery Hero shines

European stocks surged: European stocks surged on Thursday, with Germany's DAX reaching a record high, driven by gains in the tech sector. Softer inflation data boosted hopes for potential interest rate cuts, which helped offset any disappointment surrounding Nvidia's recent quarterly results.

In Germany, inflation eased to 2 per cent in August, falling below analysts' expectations of 2.3 per cent. Similarly, Spain saw its EU-harmonised inflation slow to 2.4 per cent, marking the slowest pace in a year.

The pan-European STOXX 600 index rose 0.8 per cent to 524.57 points, just shy of a new record-high close. Meanwhile, Germany's DAX gained 0.7 per cent, setting a fresh all-time high.

The easing inflation data has fuelled optimism that the European Central Bank (ECB) might reduce interest rates in September, with policymakers stressing the need for inflation to continue its downward trend.

"The latest inflation figures provide the ECB with more flexibility to adopt a looser monetary policy than initially anticipated," said Russ Mould, investment director at AJ Bell.

Tech stocks rally strong

The tech sector led the rally, with a 2.2 per cent jump, as investors largely shrugged off US chipmaker Nvidia's quarterly forecast, which fell short of some investors' high expectations. European chip stocks remained resilient, with ASM International, STMicroelectronics, and ASML Holding all rising between 3 per cent and 3.7 per cent. Software giant SAP SE also climbed nearly 2 per cent.

"It's encouraging to see that European markets have taken Nvidia's results in stride, without being overly influenced by them. It's a sign of market health that we're not overly reliant on a handful of global companies," Mould added, referring to the so-called "Magnificent Seven" stocks, which include Nvidia.

The STOXX 600 has rebounded nearly 10 per cent from its six-month lows in August, buoyed by growing expectations of easier monetary policy in both the US and Europe.

Key data watch

Looking ahead, investors will be closely monitoring eurozone inflation and unemployment data set to be released on Friday.

In other notable moves, Delivery Hero soared 12.2 per cent, making it the top gainer on the STOXX 600. The German online food delivery company reported stronger-than-expected growth in its second-quarter gross merchandise value and announced plans to list its Emirati subsidiary, Talabat, on the Dubai Stock Exchange.

Shares of French spirit makers also rose after China lifted provisional measures on brandy imported from the European Union. Remy Cointreau gained 2 per cent, while Pernod Ricard saw a similar rise after forecasting sales growth for 2025. France's CAC 40 climbed 0.8 per cent.

While most STOXX 600 sectors were in positive territory, utilities, insurance, and real estate sectors slipped between 0.2 per cent and 1.8 per cent.

(With Reuters Inputs)