Europe midday: Stoxx hits fresh record; Zalando surges into fashion

(Sharecast News) - European shares hit a fresh record high on Wednesday as investors digested data from the US and UK, despite a larger-than-expected fall in eurozone industrial production, while Zalando shares surged after upgrading forecasts. The pan-European Stoxx 600 index was up 0.23% at 507.68 having hit a new record of 507.74 in the morning session after data showed the UK economy returned to growth in the first month of 2024, according to figures released on Wednesday by the Office for National Statistics.

Gross domestic product rose 0.2% on the month in January, in line with expectations, following a 0.1% decline in December.

In the final three months of 2023, GDP fell 0.3%, having contracted by 0.1% in the previous three months, dipping the economy into a technical recession.

Industrial production fell sharply in the eurozone in January, official data showed on Wednesday, by more than expected.

According to Eurostat, the statistical office of the European Union, industrial production fell 3.2% and by 2.1% across the wider bloc. That compares to downwardly-revised growth of 1.6% in both areas in December and forecasts of a 1.8% dedcline.

In the US the consumer price index rose 0.4% in February from January and 3.2% on an annual basis. The monthly measure was in line with expectations while the 12-month reading was slightly higher.

"The UK economy snapped back to growth in January, adding fuel to the fire of speculation that the recession will indeed be super-short and ultra-mild," said Hargreaves Lansdown analyst Susannah Streeter.

"The latest snapshot showed that GDP was estimated to have come in at 0.2%, and while the economy is hardly shooting the lights out in terms of growth, there will be relief that light has emerged at the end of a difficult tunnel for many companies."

In equity news, shares in Inditex sparked after the Spanish fashion giant said 2024 had got off to a strong start.

The owner of Zara, Pull&Bear and Bershka, among others, said its spring/summer 2024 collections had been well received by customers, with total sales in the six weeks to 11 March up 11% year-on-year between 1 February and 11 March.

Shares in Vallourec surged after Luxembourg-based ArcelorMittal said it was buying a 28.4% stake in the French recycled-content steel pipe and tube maker.

German online fashion retailer Zalando forecast a return to growth this year and said it was opening up its logistics business to more players, raising hopes of a boost to its performance and helping to lift its shares.

UK construction firm Balfour Beatty also gained after annual results.

Direct Line tumbled after the UJ insurer said it had rejected a second takeover approach from Belgian rival Ageas as it continues to undervalue the group.

Reporting by Frank Prenesti for Sharecast.com