PARIS: Germany’s benchmark index scaled a fresh all-time high on Wednesday after disappointing industrial orders data in the euro zone’s largest economy supported bets of a swift run in rate cuts from the European Central Bank next year.

The pan-European STOXX 600 index rose 0.6%, while Germany’s DAX closed 0.8% higher.

Data showed a surprising decline in German industrial orders in October, down 3.7% month-on-month, reinforcing expectations of European Central Bank rate cuts next year following a dovish shift from German ECB board member Isabel Schnabel on Tuesday.

Equities were supported by a slide in eurozone government bond yields to multi-month lows.

Bonds found further support after data on US job openings led investors to price in that the Federal Reserve will cut interest rates as soon as March.

“We’re basically arguing about when rate cuts might be coming, but they are going to be first in Europe as it was sort of first into the economic downturn,” said Ben Laidler, global markets strategist at investing platform eToro.

Basic resources gained 1.6%, tracking a rise in most base metal prices, while stocks in the travel & leisure sector rose 2.3% as TUI jumped 14.8% after Europe’s biggest travel operator forecast a sharp jump in operating profit in 2024.

Among individual stocks, Germany’s Volkswagen climbed 5.4% after an audit of its jointly owned site in Xinjiang, China, found no signs of forced labour.

Weir Group rose 1.6% as the engineering firm forecast an operating margin of 20% in 2026 and raised its absolute savings target.

Ocado Group added 2.4% after J.P.Morgan upgraded the online supermarket and technology group’s stock to “neutral” from “underweight”.

Merck tanked 13.1% to the bottom of STOXX 600 after the pharmaceutical company’s experimental multiple sclerosis drug - evobrutinib - failed to meet the primary goal in late-stage trials.

British American Tobacco lost 8.4% after saying it would take a hit of around $31.5 billion on writing down the value of some US cigarette brands.