European stocks rise as technology sector boosts market

European stocks opened on a positive note, edging closer to their record highs as they followed the lead of a tech-driven rally on Wall Street. By early morning in Paris, the Stoxx Europe 600 Index had gained 0.2%, reaching 525.90 points, just shy of its all-time high of 528.08, set on September 27. Technology stocks saw notable increases, spurred by the performance of Nvidia. The company’s shares hit a record in New York, with investors reassured by its updates on product delays and long-term growth prospects.

In terms of individual performances, Ericsson AB saw a sharp rise, with its shares jumping 9.8%. This came on the back of the Swedish telecom equipment maker surpassing analysts’ expectations for the third quarter. A deal with US telecom giant AT&T Inc. appeared to be delivering strong results. In contrast, shares in ABN Amro Bank dropped 0.9%, following the Dutch government’s announcement that it planned to reduce its stake in the bank to around 30%.

Energy stocks experienced the steepest declines, driven by a fall in oil prices as concerns about potential Israeli strikes on Iranian energy facilities eased. Commenting on the market’s movements, Yann Azuelos, a senior portfolio manager at Mirabaud in Paris, remarked that markets seemed to be focusing solely on positive news, despite existing geopolitical risks. He highlighted that the general market trend was bullish, with investor optimism high concerning China’s stimulus measures, macroeconomic developments, and earnings growth projections for 2025.

Looking ahead, some of Europe’s largest companies are expected to report their earnings this week, starting with LVMH, the French luxury conglomerate, after the close on Tuesday. Despite some cooling signs in the eurozone economy, fears are growing over the financial situation in France and Germany’s weak performance. A Bloomberg survey indicated that Germany is in the grip of a mild recession, with overall output expected to remain stagnant throughout 2024, a reflection of the ongoing challenges in Europe’s largest economy.

Fidelity European Trust PLC (LON:FEV) aims to be the cornerstone long-term investment of choice for those seeking European exposure across market cycles.

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