Europe's Stoxx 600 ends week at all-time high on earnings support, soft US jobs data
The pan-European Stoxx 600 closes 0.3% up at a record 660.25 points
Europe's Stoxx 600 reached an all-time high on Friday (Aug 7), closing at a record 660.25 points after a week of strong corporate earnings and softer US jobs data. Market sentiment was buoyed by expectations of a potential US-Iran agreement, which took place throughout the week. Technology stocks led the rally, with the sector gaining 1.9 percent in the session, outperforming other sectors on the Stoxx 600.
Investors attributed the rally to a combination of factors, including the positive corporate earnings results and the unexpected US jobs report, which indicated a reduction in the likelihood of a September interest rate hike by the US Federal Reserve.
Healthcare companies, such as Genmab, Novo Nordisk, and Abivax, experienced significant gains. Genmab's stock surged 6.5 percent following the release of its first-half revenue report, which exceeded expectations, and the company raised its full-year outlook. Novo Nordisk and Abivax also saw increases of 3.9 percent and 3.5 percent, respectively. The Stoxx 600's second-quarter earnings growth is now projected to be over 22 percent, marking the strongest growth since the third quarter of 2022, according to LSEG data.
Companies within the Stoxx 600 index are now expected to report robust earnings growth, bolstering investor confidence in European corporate fundamentals, particularly among investment-grade issuers. However, market participants remain cautious due to elevated valuations, which limit room for error. Notable standout performers included Kingspan, which rose 17.8 percent following the release of its results and raised its profit forecast amid strong data center demand.
Conversely, Czech defense firm CSG declined 8 percent, despite surpassing first-half revenue expectations. Miners also gained 0.3 percent, driven by higher precious and base metal prices.
Insurer Munich Re saw a 1.4 percent drop after reporting a 6 percent rise in second-quarter net profit, but failed to meet expectations for a decline. Stellantis suffered a 1.7 percent decline following a downgrade from Bernstein, which adjusted the Franco-Italian automaker's rating to "underperform" from "market perform." Geopolitically, Iran, in collaboration with Oman, proposed a ban on hostile vessels in the Strait of Hormuz and imposed substantial fines for violating the rules.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
