Tuesday was a good day for European markets, as stocks ended the day close to nine-week record-setting levels. Utility and telecom corporations spearheaded the charge, which improved public mood in general. With a 0.7% increase, the STOXX 600 index reached its highest level in eight weeks. Europe’s indices followed suit, with Spain’s IBEX hitting levels not seen since 2008 and Germany and Ireland even setting new records.
The utilities industry shone out with a 1.8% daily gain. EDP Renovaveis in Portugal surged 4.1% after Deutsche Bank upgraded the shares to a “buy.” The stocks of onshore wind energy also surged, with Oersted surging 14.5% and Vestas Wind rising 4.8%. That boost came when a one-month suspension on a massive offshore wind projects off the coast of New York was lifted by the U.S. government.
Not far behind were telecoms. Following the forecast of enhanced free cash flow for the year, Vodafone’s stock rose 7.3%. It strengthened the upward trend and helped the telecom sector as a whole grow by 1.7%.
Markets Bounce Back Amid Global Uncertainty
Markets seemed to shake off any lingering nerves from Moody’s surprise downgrade of U.S. sovereign credit late last week. While it initially rattled investors, the dip didn’t last long.
According to Daniela Hathorn, senior market analyst at Capital.com, “Confidence was somehow shaken by the downgrade yesterday, but it appears that we swiftly moved past that.” “I feel like there is a healthier rebalancing today.”
To boost its faltering economy in the face of persistent trade disputes with the United States, China lowered its benchmark lending rates for the first time since, which added to the positive sentiment. That decision helped lift luxury stocks that rely heavily on Chinese demand. LVMH was up 1.3%, Burberry rose 3.7%, and Kering gained 4%.
Still, not everything was rosy. Geopolitical tensions flared up again, with the European Union and UK imposing new sanctions on Russia — even before the U.S. made any moves. That news introduced an additional dimension of uncertainty over ongoing peace efforts in Ukraine.
Earnings Results Bring Mixed Reactions Across Sectors
The Norwegian salmon producer, Almar, had a 7.8% decline in earnings after releasing lower-than-expected results. Strong quarterly results helped UK bread chain Greggs soar 9.2%. Diploma, an industrial supplier, increased its growth projection and reached a record high.
Meanwhile, there were reports that UBS will have to retain more capital due to new government requirements, which caused the bank to drop 3.3%. Heineken suffered a 3% drop after Femsa, a former Mexican investor, sold out its remaining stake.
Anticipating Future Developments
Looking ahead, investors are keeping an eye on global trade developments, especially with Trump’s reciprocal tariffs expected to return in early July.
For now, though, markets are being buoyed by impressive results in key sectors and positive news from global players — and that is providing European investors with a positive outcome.
