(Bloomberg) -- Germany’s main equity benchmark rose above 20,000 points for the first time as European stocks advanced for a fourth straight session, with investors looking past political risks in France.
The pan-European Stoxx 600 Index rose 0.4% by the close, marking its longest daily winning streak since August. France’s CAC 40 Index advanced 0.3%.
Construction and retail stocks outperformed, while defensive sectors such as telecoms, real estate and food and beverages were the biggest laggards. Among individual stocks, ASML Holding NV advanced after reaffirming its net sales forecast for 2025.
European stocks had been lagging since a peak in September on concerns about potential US tariffs, geopolitical risks and a faltering regional economy. Those worries were amplified by political turmoil in France, where lawmakers will hold a no-confidence vote Wednesday.
The benchmark Stoxx 600 is underperforming the S&P 500 by over 25 percentage points in dollar terms this year, the widest gap in this century.
Data from Citigroup Inc. showed positioning in the Euro Stoxx 50 remains bearish. Still, strategists at the bank said current loss positions indicate a low risk of a forced selloff.
Ulrich Urbahn, head of multi-asset strategy and research at Berenberg, said he had recently increased exposure to regional stocks as he views the bearishness as priced in.
“For European equities there is a window of opportunity until February given pessimistic positioning, rebalancing flows, hopes on German election and China macro data, the weaker euro plus a possible end to the Ukrainian war,” Urbahn said.
For more on equity markets:
- France Forces Rethink of Europe’s Sovereign Risk: Taking Stock
- M&A Watch Europe: Partners, PRS, Carlsberg, EQT, Anglo, Legrand
- French Turmoil Risks Fresh Hurdles for IPO Revival: ECM Watch
- US Stock Futures Unchanged; TransMedics, Zscaler, Microchip Fall
- Through the Roof: The London Rush
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--With assistance from Jan-Patrick Barnert and Michael Msika.
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