European stocks close the quarter with strong earnings

Major European stock indices, with the exception of the UK FTSE, closed the day in the green as the eurozone inflation dropped more than expected, easing the pressure on the ECB to cut back its monthly pace of bond buying. The Eurostoxx 600 index gained 0.3%, France's CAC was up 0.5%, Germany's Dax rose 0.4% and the UK FTSE dropped 0.4%.

The inflation rate in euro area came in at 1.5%, down from 2% in February, while the core inflation rate dropped to 0.7% in from 0.9% and marked the lowest growth in nearly a year. The rate of price growth supported the recent statements by ECB Executive Board member Benoit Coeure, who said measures of underlying inflation “remain subdued." Following the data, “For the ECB, it’s clearly an argument for the doves,” said Frederic Pretet, inflation and rates strategist at Scotiabank.

With the closing bell, European stocks also wrapped up the first quarter of 2017 and recorded significant gains. A significant portion of the quarterly rally took place during March as the Dutch election results were cheered by the participants and French presidential candidate Le Pen, who is willing to separate France from the EU, tanked in the first live debate, easing concerns over the integrity of the Union. 

Furthermore, the Trump stock-rally came to a halt as the administration failed to pass the healthcare bill raising concerns over the ability of Trump's administration to move on with pro-growth policies including tax cuts and infrastructure spending. As the investors moved away from the American stocks, they flodded the European markets. “Europe is a great leveraged play on global reflation,” Rupert Harrison, a multi asset strategies portfolio manager at BlackRock, said in an interview with Bloomberg TV on March 27. “We’ve been reducing our U.S. equity exposure partially because we thought expectations were a little too high. The data from Europe is still pretty strong -- there’s more value and still more momentum.”

On the first quarter, the UK FTSE gained 2.84%, France's CAC rose 5.15%, Germany's Dax was up 7.25%, Italy's MIB gained 6.47%, and finally Spain's Ibex rose 11.66%.