EUROPEAN real estate stocks surged, propelling the benchmark index to a one-week high on Friday (Nov 22), while easing of geopolitical tensions also relieved some recent selling pressure.
The pan-European Stoxx 600 jumped 1.2 per cent, its best daily performance in nearly two months.
The session’s positive performance contributed to a 1.1 per cent gain for the index this week, breaking a four-week losing streak which was the longest since May 2022.
The index had lost more than 4 per cent in the past four weeks due to a combination of factors, including rising uncertainty over the Ukraine-Russia conflict, likely economic implications of US President-elect Donald Trump’s proposed tariffs, and domestic growth-related woes.
The benchmark index is up about 5 per cent for the year, sharply lagging the US S&P 500’s near 25 per cent jump.
“The outlook for Europe compared to the US is actually pretty grim,” said Stefan Koopman, senior market economist at Rabobank, citing poor export and industrial demand perspectives.
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Data showed eurozone business activity took a surprisingly sharp turn for the worse this month, owing to contractions in the services industry and manufacturing sinking deeper into recession.
Germany’s economy grew less than previously estimated in the third quarter, with the country set to be the worst performer among the Group of Seven rich democracies this year.
Rate-sensitive real estate stocks were the biggest boost on the Stoxx 600. A lower interest rate environment leads to lower costs of borrowing, in turn boosting house sales.
Banks were the biggest drag, limiting gains on the index, losing 1.3 per cent.
“The latest flash purchasing managers indexes suggest that while industry continues to struggle across advanced economies, services activity is now slowing in Europe too,” analysts from Capital Economics said in a note.
Meanwhile, “protectionist policies from the US next year will have only a small economic impact on Europe, but the fallout will vary between countries and there are risks of greater damage if the trade conflict escalates,” they added.
The tech index rose 1.3 per cent, led by chip stocks. The sector ended Thursday higher on confidence in the artificial intelligence boom despite investor disappointment over US-based Nvidia’s revenue forecast.
Other sectors such as media and healthcare were also up more than 2.7 per cent each.
Miniature war game maker Games Workshop Group jumped 17.2 per cent, hitting record highs, after an upbeat half-year forecast.
Brenntag rose 4.4 per cent after Berenberg upgraded the chemicals distributor’s stock to “buy” from “hold.”
Soitec extended gains for the second day, up 7.2 per cent on Friday, after the French semiconductor materials supplier reiterated its 2025 outlook.
Thales fell 2.8 per cent on Britain’s Serious Fraud Office’s investigation of suspected bribery and corruption at the company jointly with French authorities.
French infrastructure and technology company Technip Energies fell for the second day, down 3.8 per cent on Friday, after setting out its short-term and medium-term targets.
Nexans SA dropped 3 per cent after the sale of a 5 per cent stake in the French cable maker by Chile’s richest family. REUTERS
