Germany leads European shares to record highs after big property deal

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May 25 (Reuters) - European stocks hit record highs on Tuesday as a billion-dollar takeover deal combining two of Germany’s biggest property developers and soothing comments about inflation drove an upbeat mood among investors.

The pan-European STOXX 600 index rose 0.3% to 446.44 points — an all-time high. The index surpassed its early-May peak of 446.19.

Germany’s DAX gained 0.8%, also hitting a record high after a long weekend, boosted by news that Europe’s largest residential property group Vonovia SE agreed to take over its rival Deutsche Wohnen for about 18 billion euros ($22 billion).

Deutsche Wohnen surged 15.7%, while Vonovia slipped 6.2%. Europe’s wider real estate index added 0.8%.

Technology stocks rallied 1.0% after their Wall Street peers climbed overnight on fresh insistence from U.S. Federal Reserve officials that loose policy would stay on hold. (Reporting by Sruthi Shankar in Bengaluru; editing by Uttaresh.V)