European stocks begin the week with gains

European stocks rose on Monday, with the pan-European Stoxx 600 index up 1.2% by mid-morning in London. All sectors were in positive territory, led by construction and materials stocks, which gained over 2%. This upturn followed three weeks of consecutive losses, driven by investor uncertainty regarding the potential for universal tariffs under U.S. President-elect Donald Trump.

Investors anticipate several important data releases this week, including inflation reports from Germany, the U.S., and the U.K., as well as British GDP figures. Meanwhile, U.S. stock futures pointed higher following a strong rally, with both the Dow and S&P 500 hitting record highs after Trump’s election win. This momentum was further supported by the Federal Reserve’s recent decision to lower interest rates by a quarter percentage point. Global markets are now awaiting U.S. inflation data expected later this week.

While European stocks moved higher, Asia-Pacific markets showed declines on Monday. China’s latest economic stimulus measures disappointed, and its October inflation numbers fell below expectations. Within Europe, construction and materials stocks were the strongest performers. Notably, Heidelberg Materials in Germany saw shares increase by over 4%, following a target price hike from JPMorgan and Citigroup. The stock hit a record high on Monday, bolstering a nearly 50% year-to-date increase. French firm Saint-Gobain and Italian company Buzzi also showed gains, each up around 3.6%.

Christian Dery, a macro strategist at Capital Fund Management, commented that European stocks are unlikely to match U.S. market gains. According to Dery, structural issues in Europe, such as fiscal constraints in countries like France and Italy, contribute to this underperformance. He noted that without a significant fiscal boost, Europe is unlikely to mirror the U.S.’s strong market performance. So far this year, the Stoxx 600 has gained close to 7%, while the S&P 500 has advanced by over 25%.

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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