Europe’s STOXX 600 Reaches Record High Amid Strong Corporate Earnings

Europe’s STOXX 600 benchmark index rose by 0.3% by 0820 GMT today, achieving a new record high. This follows a record close the previous day and a year-to-date gain of over 9%, closely mirroring the nearly 10% increase in the US S&P 500 index.

Investor optimism is high, driven by robust earnings reports from companies such as Experian and Commerzbank. Experian’s shares surged by 7.8% following a positive forecast for annual organic revenue growth. Simultaneously, Commerzbank’s shares increased by 4.3% after reporting its best quarterly profit in a decade, surpassing expectations. Additionally, InPost’s shares rose by 9.4% on higher first-quarter core earnings, making it a top performer in the industrial goods and services sector. Merck KGaA also experienced a 4.3% rise due to better-than-expected adjusted earnings, boosting the healthcare index.

Strong corporate earnings are propelling European stock markets to new heights. With 60.7% of STOXX 600 companies exceeding first-quarter earnings estimates, investor confidence is bolstered. This outperformance surpasses the typical quarterly beat rate of 54%, indicating robust corporate health. However, not all companies are flourishing; renewable energy group Neste and meal-kit company HelloFresh experienced significant declines due to outlook downgrades and ratings cuts.

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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