European Stock Index Closes at Highest Level in Nearly 4 Months
The European Stoxx 600 index closed higher on Wednesday, bolstered by gains in the technology and industrial sectors, seemingly shrugging off concerns over potential tariffs sparked by comments from U.S. President Donald Trump.
According to Reuters, the Stoxx 600 rose by 0.4%, reaching its highest level since September 2024. The index hit a new intraday record during the session.
Tech stocks led the gains, increasing by 1.3%, buoyed by their counterparts’ performance on Wall Street. Notably, Adidas saw a 6% jump after the German sportswear brand announced preliminary Q4 results that exceeded expectations, showcasing strong sales and profitability during the crucial holiday shopping period.
The German DAX index outperformed other European benchmarks, rising by 1% to close at a record high. Despite Trump’s threats of new tariffs on the European Union and a 10% tariff on Chinese goods by February 1st, markets maintained their composure.
Since the start of the year, the Stoxx 600 has advanced by 4%, slightly outperforming the S&P 500, which has risen by 3.6%. This suggests a growing investor confidence in Europe.
Susanna Streeter, head of Money and Markets at Hargreaves Lansdown, noted, “You are seeing renewed enthusiasm… Europe might be showing more resilience in an uncertain world and with the unpredictable nature of Trump’s administration. Investors are looking for value in some European stock markets.”
On the monetary policy front,
policymakers at the European Central Bank (ECB) are leaning towards further interest rate cuts. The expected rate cut next week seems almost certain, with more quantitative easing measures likely to be announced.
Christine Lagarde, ECB President, speaking to CNBC in Davos, Switzerland, about interest rates, said, “The direction is very clear. The pace at which we will see it will depend on the data, but gradual movement is definitely something that comes to mind at the moment.”
On the corporate side, Munich Re’s shares rose by 4.1% after the CEO of the world’s largest reinsurance company stated there is room to improve their targeted net profit of 6 billion euros ($6.25 billion) for 2025 in the coming years.
Siemens Energy’s stock climbed 6.5% following expectations of a significant boost from Trump’s
announcement of up to $500 billion in private sector investment in AI infrastructure.
However, Barry Callebaut shares fell by 8% after the chocolate manufacturer reported lower-
than-expected sales for the first quarter.
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