FRANKFURT: European shares ended higher on Wednesday, stabilising as investors assessed fiscal challenges after a selloff in longer-dated bonds had sparked risk-off sentiment in the previous session.
The continent-wide STOXX 600 index closed 0.65percent higher at 546.72 points, boosted by healthcare stocks such as Roche Holdings and AstraZeneca. Basic resources also extended support by rising 1.5percent, influenced by a jump in copper prices on growing expectations of a US interest rate cut later in the month.
The day’s moves follow the STOXX 600’s biggest one-day loss in a month on Tuesday, driven by a multiyear jump in bond yields amid mounting concerns about fiscal pressures in developed economies. France’s 30-year yield fell about 5 basis points to 4.4547percent after hitting a 16-year high on Tuesday, but caution prevailed amid political worries as Prime Minister Francois Bayrou’s government braces for a no-confidence motion next week.
Losing the key vote could collapse Bayrou’s minority coalition government and push France into deeper political and fiscal uncertainty. The developments were triggered by the prime minister’s pushing through of unpopular plans for a budget squeeze in 2026. Long-dated bond yields in Germany and Italy also settled down after the previous day’s spike.
“What we see today is maybe a small correction on the poor performance that we have seen yesterday … bonds have stabilized now, but of course the risks have not disappeared,” said Teeuwe Mevissen, senior market economist at Rabobank. Meanwhile, Adidas climbed 4.8percent after brokerage Jefferies raised its rating on the German sportswear brand to “buy” from “hold” and J.P.Morgan placed it on a positive catalyst watch.
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