PARIS: Europe’s blue-chip stocks hit their highest in 22 years on Wednesday as investors sought mega-cap quality stocks and as cooling US inflation buoyed markets.

The blue-chip STOXX 50 index was last up 0.1%, coming off its highest level since 2001, which it had hit prior to the inflation data.

The pan-European STOXX 600 index rose 0.2%, also having pared some early gains.

A US Labor Department report showed the Consumer Price Index climbed 0.1% last month after advancing 0.4% in February. In the 12 months through March, it has increased 5%, the smallest year-on-year gain since May 2021.

The data bolstered hopes that the Fed could potentially hit the brakes on its interest rate hikes soon, especially after a banking crisis that has raised fears of a recession.

A majority of traders, however, still expect the Fed to hike rates by 25 basis points in May.

“Today’s fall in the rate of inflation is likely to be welcomed by investors, who may speculate that the Fed could soon pause its cycle of monetary tightening,” said Richard Flynn, Managing Director of Charles Schwab UK.