Article content
(Bloomberg) — European stocks hit a fresh record high as investors weighed the latest round of corporate earnings reports and assessed the potential for a broader trade war with the US.
Article content
The Stoxx Europe 600 Index rose 0.2% at the close in London, reaching an all-time peak for two days in a row. Banks and energy stocks outperformed, while miners and travel were the biggest laggards.
Article content
Kering SA pared gains after rising as much as 6.7% as a sales drop in its biggest label Gucci showed there is still some way to go before the brand recovers. BP Plc was down 0.6% after the energy firm pledged major changes at its upcoming strategy update just days after the intervention of activist investor Elliott Investment Management.
Investors are trying to chart the outlook for European stocks after the benchmark started the year with a record outperformance versus the S&P 500. While fourth-quarter earnings have been better than expected so far, the possibility of a trade war with the US has introduced a note of caution.
US President Donald Trump ordered a 25% tariff on steel and aluminum imports, escalating his efforts to protect politically important US industries with levies.
“Investors clearly are betting on a deal similar to Australia where the steel tariffs have already been suspended overnight,” said Panmure Liberum strategist Joachim Klement. “Even so, tariffs on steel and aluminum as well as the threatened equalization of US tariffs to EU levels are unlikely to derail the European economy or the stock market.”
Article content
Among other individual moves, UniCredit SpA was down as much as 3.8% even as it reported higher-than-expected profit. Chief Executive Officer Andrea Orcel told Bloomberg he expected to decide on a potential takeover of Commerzbank AG at the end of this year or early in 2026.
Morgan Stanley strategists including Matthew Nguyen and Marina Zavolock said the number of stocks beating profit estimates has picked up, with the earnings net beat ratio rising to 23% from 11% a week earlier.
For more on equity markets:
- Miners Can Manage Tariffs, Not Economic Growth Hit: Taking Stock
- M&A Watch Europe: Merck KGaA, Novartis, BP, Unicredit, Talgo
- Strong Polish Debut Sets Stage for Europe IPO Kickoff: ECM Watch
- US Stock Futures Fall; Fluence Energy, Harmonic Fall
- BP in Elliott’s Crosshairs: The London Rush
You want more news on this market? Click here for a curated First Word channel of actionable news from Bloomberg and select sources. It can be customized to your preferences by clicking into Actions on the toolbar or hitting the HELP key for assistance. To subscribe to a daily list of European analyst rating changes, click here.
Share this article in your social network
