Global Markets Surge as Investors Shrug Off Tariff Fears
European Stocks Reach New Heights
Despite fresh threats from US President Donald Trump, European stocks soared to a record high on Wednesday, driven by strong performances from technology and healthcare giants. The pan-European STOXX 600 index climbed 0.6% to surpass its previous record high, set on September 27, 2024.
Healthcare Stocks Lead the Charge
Heavyweight healthcare stocks were the main drivers of the rally, rising 1% as a whole. Drugmaker Novo Nordisk led the way, with its shares surging 2.3%. The sector’s strong performance was a key factor in the overall market’s gains.
Adidas Shares Jump on Strong Earnings
German sportswear brand Adidas saw its shares skyrocket 6.3% after reporting better-than-expected preliminary fourth-quarter results. The company’s strong sales and profitability during the crucial holiday shopping period boosted investor confidence.
Germany’s Benchmark Index Outperforms Peers
Germany’s benchmark index was the top performer among its regional peers, adding 1.1% to reach a record peak. The country’s strong economic fundamentals and robust corporate earnings have made it an attractive destination for investors.
Global Equities Receive Boost
Equities around the world received a boost after Trump announced a series of new policies, accompanied by robust earnings from corporate giants like Netflix. This lifted investor sentiment and helped shrug off concerns over Trump’s tariff threats.
Tariff Fears Take a Backseat
Despite Trump’s pledge to impose fresh levies on the European Union and a 10% tariff on goods from China, markets seemed to brush off the concerns. According to Russ Mould, investment director at AJ Bell, “there’s still no clarity on exactly what the tariff plan is… markets have braced themselves for very bad news and not received it yet.”
Investors Flock to European Equities
In recent weeks, investors have been actively buying European equities, attracted by relatively low valuations compared to the US market. A report by Bank of America revealed that European stocks saw their second-largest allocation in a quarter of a century in January.
ECB Policymakers Signal Further Rate Cuts
European Central Bank policymakers have lined up behind further interest rate cuts, indicating that next week’s reduction is all but certain. ECB President Christine Lagarde stated that “the direction is very clear… the pace we shall see depends on data, but a gradual move is certainly something that comes to mind at the moment.”
Other Stocks in Focus
In other news, Schaeffler tumbled 12.4% after reporting lower-than-expected preliminary results for 2024. British airline easyJet slid 2.7% after flagging weaker revenue expectations for the second quarter, although the company cut losses in the first quarter and maintained its profit guidance for the year.
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