ADVERTISEMENT

Business

European Stocks Bounce on Bullish Outlooks From ASML, Siemens

(Bloomberg)

(Bloomberg) -- European stocks rebounded as bullish outlooks by both Siemens AG and ASML Holding NV helped the market recoup some of the losses triggered by Donald Trump’s election victory.

The Stoxx Europe 600 Index ended the session 1.1% higher, with technology stocks outperforming and all other sectors in positive territory. Investors are assessing the path of interest rates as US producer prices picked up in October, fueled in part by gains in portfolio management and other categories that feed into the Federal Reserve’s preferred inflation gauge.

Among individual movers, shares in ASML rallied as the Dutch maker of advanced chip-making machines reaffirmed its long-term revenue forecast amid an artificial intelligence-driven boom in semiconductor demand.

German industrial giant Siemens added to the cheer, with a positive sales growth outlook that boosted its shares to a record high. Burberry Group Plc gained the most ever after the British luxury-goods maker’s retail comparable sales for the first half surpassed expectations, with analysts particularly positive on the new chief executive officer’s strategy for the group.

Europe’s benchmark index has been under pressure since Trump won the race to the White House last week, with his so-called America-first policies, including hefty trade tariffs, widely expected to hurt markets outside the US. Stocks in the US have surged on the prospect of tax cuts and deregulation.

“There is indeed a rotation going on,” said Raphael Thuin, head of capital market strategies at Tikehau Capital. Investors are “repositioning in the US to the detriment of Europe, triggering dislocation.”

Thuin said the economic cycle may tip to Europe’s favor moving into 2025, and relatively cheap stock valuations could prove an attraction, provided China succeeds in propping up its economy.

The Stoxx 600 is trailing the S&P 500 this year by the most in at least 24 years in dollar terms, and some investors expect the gap to remain wide.

Data showed the euro-area economy expanded 0.9% on an annual basis in the third quarter — in line with forecasts — keeping alive expectations that the European Central Bank will cut interest rates in December. 

In the US, several Fed members including Chair Jerome Powell are expected to speak later on Thursday. Officials such as Kansas City Fed President Jeff Schmid recently expressed their doubts over how far the central bank will need to lower interest rates. 

Among other stock movers, shares in Banca Monte dei Paschi di Siena SpA soared after Giorgia Meloni’s government sold a minority stake to rival Banco BPM SpA. Allegro.eu SA slumped after the Polish e-commerce platform published a fourth-quarter profit outlook that analysts said was below expectations.

For more on equity markets:

  • Europe Lags Behind US Rally at Historic Levels: Taking Stock
  • M&A Watch Europe: Paschi, BPM, Barclays, Embracer, Worldline
  • China Firms Eye Frankfurt for Europe Listings Revival: ECM Watch
  • US Stock Futures Unchanged; Dlocal, NextNav, Beazer Homes Gain
  • Thames Gets Class A Nod: The London Rush

You want more news on this market? Click here for a curated First Word channel of actionable news from Bloomberg and select sources. It can be customized to your preferences by clicking into Actions on the toolbar or hitting the HELP key for assistance. To subscribe to a daily list of European analyst rating changes, click here.

--With assistance from Sujata Rao, Kit Rees and Philip Sanders.

©2024 Bloomberg L.P.