European Markets Hold Steady Ahead of Key Inflation Data
As the continent prepares for crucial inflation readings, Europe’s STOXX 600 index traded at its highest level in three weeks, holding steady at 513.28 points. Despite initial losses, the premier index reversed its course, driven by gains in industrials and financial services, which offset losses in healthcare stocks.
Financial Services Sector Sees Boost
A nearly 5% rise in Partners Group, following a rating upgrade by UBS to “buy”, propelled the financial services sector 0.9% higher. This upward trend was further supported by a 2.7% gain in UK’s Next, which lifted its annual profit outlook for the fourth time in six months.
Industrial Goods and Services See Gains
The industrial goods and services sector rose 0.3%, driven by a 9.8% surge in heavy machinery & vehicles supplier Kion Group. The company’s partnership with Nvidia and IT services provider Accenture to optimize supply chains with AI technologies contributed to its gains. A 4.7% jump in Volvo also aided the sector’s growth.
Healthcare Sector Sees Decline
On the downside, the healthcare sector fell 0.4%, with index heavyweight Novo Nordisk losing 2.3% and AstraZeneca declining 1.2%.
Market Volatility Amidst Uncertainty
The pan-European benchmark had jumped nearly 1% in the previous session, following a report suggesting U.S. President-elect Donald Trump may opt for a less aggressive tariff strategy. However, Trump later denied the report, adding to the uncertainty in the days leading up to his inauguration. Analysts at Societe Generale noted that “rumours and denials have a history of misguiding investors and causing temporary dislocations across a range of assets.”
Euro Zone Inflation Reading Takes Center Stage
The focus now shifts to the euro zone inflation reading, due later in the session, which could offer more insights into the European Central Bank’s interest rate outlook. French consumer prices rose less than anticipated in December, while Swiss inflation fell again, fuelling expectations for more interest rate cuts by the Swiss National Bank.
European Equities Look to Rebound
European equities lagged their global counterparts last year, weighed down by looming tariff threats, a slowing economy, and geopolitical uncertainty in top economies France and Germany. However, Deutsche Bank has turned “overweight” on European equities, citing an improving political climate, macro conditions, and potential stimulus measures from China in 2025.
Notable Stocks
Sodexo slid 8.4% after the French food caterer missed market expectations on first-quarter organic revenue.
Leave a Reply