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European shares scale new record high on earnings boost

Credit: REUTERS/Staff

By Khushi Singh

March 13 (Reuters) - European shares hit new record highs on Wednesday, led by gains in retail and utility stocks following upbeat corporate updates, while investors awaited industrial production data from the region.

The pan-European STOXX 600 .STOXX was up 0.1% by 9:13 GMT, following Tuesday's record-high close.

The retail <.SXRP> index emerged as the top sectoral performer, adding 2.5%, following a 13.6% jump in Zalando ZALG.DE shares. The online fashion retailer reported a fourth-quarter profit beat and announced a share buy-back program, anticipating a return to growth and improved profitability in 2024.

Zara-owner Inditex ITX.MC shares jumped 4.5% following higher salesat constant currencies in the first half of its spring season, boosted by upmarket fashions and sustained strong momentum.

Shares in E.ON EONGn.DEsurged 5.0% as Europe's largest operator of energy networks increased its five-year investment target to 42 billion euros ($46 billion) and provided 2024 profit guidance that beat expectations.

The upbeat outlook and investment goal propelled the broader utilities index .SX6P up 1.1%.

Upbeat corporate updates have fostered a risk-on sentiment among European investors, reflecting confidence in the economy and enabling investment in riskier assetsdespite sticky inflation.

In other company news, Vallourec VLLP.PA shares climbed 6.4% after steelmaker ArcelorMittal MT.LU announced acquisition of a 28.4% stake in the France-based company for around 955 million euros ($1.04 billion) to increase its presence in the tubular business.

In contrast, Adidas ADSGn.DE shares lost 1.9% after the German sportswear giant posted its first loss in over 30 years in 2023 and projected a decline in North America sales this year due to the termination of its ties with rapper Kanye West in 2022, leading to the suspension of sales of the highly profitable Yeezy sneaker line.

"While footwear sales are storming ahead thanks to strong demand for Sambas and Gazelles, Adidas apparel has fallen out of fashion, and the rise in popularity of athleisure clothing with brands like Lululemon and Alo has come at the expense of Adidas’ clothing lines," said Victoria Scholar, head of investment at interactive investor.

On the data front, investors awaited the release of euro zone industrial production data for January, due 1000 GMT, seeking further insights into the region's economic resilience and the potential start of an interest rate cut cycle.

(Reporting by Khushi Singh in Bengaluru; Editing by Rashmi Aich and Dhanya Ann Thoppil)

((Khushi.Singh@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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