Europe close: Stocks continue advance, 52-week highs beckon

European stocks continued their push towards their 52-week highs as fresh data pointed yet again to slower price growth in the U.S. going forwards.

And in parallel, weekly jobless data published in the States, feeding hopes - rightly or wrongly - of a certain 'goldilocks' scenario for a so-called 'soft landing' in the U.S..

The pan-regional Stoxx 600 index was up 0.61% to 461.36, alongside a 0.78% rise for Italy's FTSE Mib to 28,774.77, alongside similar gains for the other main regional indices.

"This development has sparked hopes that the Federal Reserve will soon put an end to its tightening of monetary policy," says IG chief market analyst Chris Beauchamp.

"The figures reveal that U.S. producer prices saw a meagre rise in June, with the annual increase in producer inflation being the smallest it has been in almost three years. In addition, a separate report brought unexpected news that weekly jobless claims had fallen, suggesting that the labour market is still experiencing a shortage of workers."

News out the euro area was more glum with Eurostat reporting a 2.2% year-on-year drop in industrial production during the month of May (consensus: -1.2%).

Pantheon Macroeconomics said the outlook for second quarter output "poor", although that forecast assumed a 4.5% contraction in Irish production - which might still change.

Overnight, data showed that Chinese exports during June recorded their heaviest fall in three years in June, slumping to a worse-than-expected 12.4% year-on-year, although in volume and seasonally adjusted terms they were only slightly lower, wrote Capital Economics.

Meanwhile UK GDP data showed the British economy contracted by less than expected in May at 0.1%, but the housing market showed signs of a slowdown in June, reflected in a trading statement from builder Barratt which said it expected to complete fewer homes this year, hitting its share price along with sector peers Taylor Wimpey, Bellway and Persimmon.

In other equity news, Swatch Group reported record first-half sales growth as the last Covid restrictions in Asia were removed and strong trading in Europe and North America also boosted the watchmaker.

Dr Martens shares dipped even after the bootmaker said said trading since the start of the current financial year had been in line with expectations, adding that progress had been made rectifying the US warehousing fiasco that led to a series of profit warnings.

Diploma shares outperformed the market after the distribution specialist announced the purchase of DICSA for £170m and said current trading was in line with expectations as third-quarter revenues rose 9%.