PARIS: Europe’s benchmark stock index hit its highest in over two years on Monday on strength in healthcare stocks, while French and German shares lost some steam after scaling record highs last week as economic concerns weighed on sentiment.
The pan-European STOXX 600 closed 0.2% higher, gaining for the fourth day. Trade volumes were light, with US markets shut for a public holiday.
Healthcare climbed 1% to a near two-year high, led by AstraZeneca which jumped 3.2% after a combination of its blockbuster cancer drug Tagrisso with chemotherapy to treat a type of lung cancer was approved by the US Food and Drug Administration.
Meanwhile, basic resources fell 1% as copper prices dropped after China held key rates on medium-term loans steady and markets focused on the country’s ailing property market.
France’s benchmark index was flat after the government lowered its 2024 GDP growth forecast to 1% from 1.4% as war in Ukraine and Gaza and a slowdown at top trading partners darkened the outlook.
The Bundesbank in a regular monthly report said Germany is likely in recession due to weak external demand, cautious consumers and stalling domestic investment. The benchmark DAX was down 0.2%.
“Economic uncertainty will create market volatility, but markets are forward looking and the expectations of falling inflation, and in time, falling interest rates have provided a boost to stock markets,” said Emma Wall, head of investment analysis and research, Hargreaves Lansdown.
The STOXX 600 notched a fourth straight weekly gain on Friday, driven by optimism around robust corporate earnings and hopes of imminent rate cuts by the ECB.
Over the course of this week, investors will monitor final inflation data and flash PMI readings for the euro zone and Germany’s fourth-quarter GDP to gauge the continent’s economic status.
Forvia slumped 12.7%, reversing early gains. The world’s seventh-largest automotive supplier plans to cut up to 10,000 jobs in Europe over next five years.
Santander gained 1.8% following a new share buyback programme and boosted dividend, helping Spain’s IBEX 35 rise 0.6%.
Rheinmetall jumped 4.1% on the top artillery producer’s plans to open an ammunition factory in Ukraine.
Bechtle shed 5.5% after Barclays started coverage of the German IT provider with an “underweight” rating.
Telecom Italia gained 5.9% after Bank of America upgraded the stock to “buy” from “hold”, pushing the telecommunication index to a near two-week high.
Currys soared 36.4% as China’s JD.com said it is evaluating a possible offer for the British electricals retailer.
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