European stocks hit record highs on Tuesday, as a billiondollar deal combining two of Germanys biggest property developers and a rally in technology shares after soothing comments on inflation lifted investor sentiment.
The panEuropean STOXX 600 index rose 0.3 to an alltime high of 446.47 points after it surpassed its earlyMay peak of 446.19.
Germanys DAX gained 0.8, hitting a record high after a long weekend, boosted by news that Europes largest residential property group Vonovia SE agreed to take over its rival Deutsche Wohnen for about 18 billion euros 22 billion.
Deutsche Wohnen surged 15.5, while Vonovia fell 4.1. Europes wider real estate index added 1.7 to touch the highest level in over a year.
Technology stocks rallied 1.2 after their Wall Street peers climbed overnight on fresh insistence from U.S. Federal Reserve officials that loose policy would stay on hold.
A lessening of inflation fears saw euro zone government bond yields edge down for the third day in a row. US
In the last couple of days, bond yields have come down a little bit and that has allowed equity markets to breathe again, said Roland Kayolan, European equity strategist at Societe Generale.
Were still in a phase where economies are reopening gradually in Europe and we should see better leading indicators in the coming months.
Investors looked past data that showed German economy shrank more than expected in the first quarter as business morale improved in May, with companies turning more…