EUROPE’S Stoxx 600 ended higher on Friday (Oct 18), as tech stocks made a strong comeback at the end of a bumpy week, while the European Central Bank’s (ECB) rate cut and a flurry of corporate earnings helped the index deliver a second straight week of gains.
The Stoxx 600 closed up 0.2 per cent as the tech sector led gains with a 2 per cent jump.
That cut the weekly loss for the tech index to 6 per cent, but it remained the worst-performing sector this week after ASML’s weak 2025 sales forecast sparked a rout in chip stocks globally.
The computer chip equipment maker’s shares were up 1 per cent on Friday, while chip stocks Soitec and BE Semiconductor Industries were up 5.6 per cent and 2.8 per cent, respectively.
Basic resources shares climbed 1.4 per cent, boosted by strong copper prices.
The luxury stocks index rose 1.1 per cent after a sell-off earlier this week following LVMH’s weak third-quarter sales.
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With LVMH, other luxury giants such as Gucci-owner Kering and Hermes rose 3.5 per cent and 1 per cent respectively, aiding France’s main CAC 40 index that gained 0.4 per cent.
Brunello Cucinelli rose 2.6 per cent following the Italian luxury group’s strong nine-month revenue performance.
However, brokerage Goldman Sachs slashed its 2024 earnings growth forecast for Europe’s Stoxx 600 index to 2 per cent from 6 per cent, citing risks from rising corporate taxes and potential trade tariffs.
On the policy front, the ECB trimmed its interest rates to 3.25 per cent on Thursday. Sources said a fourth cut in December was likely unless key data turned south by then.
The Stoxx index hit record highs multiple times earlier this year, but has struggled to make any gains since mid-May as sluggish economic growth and weak Chinese demand held back investors, despite European stocks trading at cheaper valuations than their US peers.
“The particular point of vulnerability for Europe, is that the economic downside looks to be much riskier than in the US, so trend growth is slower and you’re much more vulnerable to downside risks and shocks,” said Daniel Murray, deputy CIO & global head of research at EFGAM.
Elisa fell 4.7 per cent after the Finnish telecom company’s third-quarter revenue missed expectations, while Swedish medical equipment maker Getinge dropped 5 per cent after third-quarter core earnings missed forecasts. REUTERS
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Publish date : 2024-10-18 15:18:00
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