European Stocks Hit Fresh Record on ECB Stimulus, Growth Outlook

European equities hit a second record high in as many days, boosted by expectations that the European Central Bank won’t hit the brakes on stimulus measures despite mounting evidence of a robust economic rebound.

The Stoxx Europe 600 Index climbed 0.6%, tracking U.S. and Asian shares higher. Technology stocks were among the biggest gainers, fueled by a boost for software firms from U.S. peer’s earnings report. Banks and insurers also rose, with HSBC Holdings Plc and Allianz SE both climbing 1.1%.

Marimekko, Cattolica Gain; Corbion Falls: EMEA Equity Movers

The Stoxx 600 closed the week 1% higher, and is set for its fourth consecutive month of gains, as vaccinations against the coronavirus progress, while a coordinated fiscal and monetary stimulus boost the region’s growth outlook. In the U.K. the FTSE 250 rose 0.1%, with strategists at Goldman Sachs Group Inc. saying British equities overall offer good value to global investors.

European Stocks Hit Fresh Record on ECB Stimulus, Growth Outlook

“Overheating fears appear to be cooling down, with commodities and bond yields both coming off, the latter despite gentle tapering signals from the Fed,” Barclays analysts led by Emmanuel Cau wrote in a note Friday. “Lack of catalysts has left investors treading water while they await the next big move, but we think the big picture hasn’t changed much and remains supportive of equities.”

Among individual movers, Banco Sabadell SA dropped 6.5% after an analyst at Jefferies said its new strategic plan that includes cost savings “may require additional convincing.” Clean-energy stocks including Vestas Wind Systems A/S and Siemens Gamesa rose as the U.S. Senate Finance Committee is set to advance a $259.5 billion package of clean energy tax credits. By contrast, oil major Royal Dutch Shell Plc fell 0.4%, after Moody’s Investors Service warned that a Dutch court ruling shows the industry faces a higher credit risk.

European equity funds had their largest inflow since February 2018 with $2.8 billion in the week through May 26, according to Bank of America Corp. and EPFR Global data. Trading volumes surged on Thursday, exceeding the Stoxx 600’s 12-month average by about 67%, as changes from the MSCI semi-annual index review took place at the close.

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