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Deutsche Bank hits 6-year high on MS upgrade

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DS Smith ( DITHF ) jumps on $7.22 bln buyout offer

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Sweden's central bank keeps interest rates unchanged

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STOXX 600 down 0.1%

(Updated at 0923 GMT)

By Shristi Achar A

March 27 (Reuters) - European stocks struggled for

direction on Wednesday after closing at a record high in the

previous session as investors waited for more economic data due

later this week, while H&M shares surged following upbeat

quarterly results.

The pan-European STOXX 600 edged 0.1% lower, as of

0923 GMT.

Oil and gas shares were the biggest drag, down 1%,

mirroring weak oil prices on rising U.S. crude inventories.

A 10.6% tumble in shares of Swedish software firm Fortnox

also weighed on the index.

H&M topped the gains, rising 13.1% after the

world's second-largest listed fashion retailer beat

first-quarter operating profit estimates.

Still, the index is eyeing a second straight quarterly gain,

with a 6.6% gain so far.

Recent dovish signals from major central banks and a rally

in technology stocks powered by the artificial intelligence

fervour have spurred STOXX 600 to record highs.

"This week is likely to be dominated by position squaring as

we enter into a holiday period. The key data for the week is on

Friday, when the market is closed," said Mohit Kumar, chief

economist Europe at Jefferies.

Focus will shift to the euro-zone consumer and economic

sentiment data for March later in the day. The U.S. personal

expenditure consumption data, due on Friday, will be closely

watched for further cues on the Federal Reserve's timing of

interest rate cuts.

"It doesn't matter whether we get the first-rate cut in June

or July, what matters is that central banks, globally, are

moving towards an easing cycle," Kumar added.

Adding to the dovish signals, ECB board member Piero

Cipollone said the European Central Bank is increasingly

confident that inflation will fall back to its 2% target by

mid-2025 as wage growth moderates.

Meanwhile, Sweden's central bank held its key rate unchanged

at 4.00% as expected and said that inflation pressures had now

eased enough for the policy rate to be cut in the coming months.

Among other major stocks, Deutsche Bank gained

3.4% and notched a six-year high after Morgan Stanley upgraded

the German lender to "overweight." The stock propped up

Germany's DAX 40 index 0.1%.

DS Smith ( DITHF ) jumped 7% after the British paper and

packaging firm said it was in talks with International Paper ( IP )

for an all-stock offer valued at 5.72 billion pounds

($7.22 billion).

European markets will be shut on Friday and Monday for

Easter holidays.

(Reporting by Shristi Achar A in Bengaluru; Editing by Rashmi

Aich and Sriraj Kalluvila)