European Markets Extend Rally to Fourth Week as Strong Earnings and M&A Hopes Drive Benchmarks to Records

Deep News01:04

European equity markets have posted gains for the fourth consecutive week, with the regional benchmark hitting fresh highs as a stronger-than-expected earnings season and growing expectations for merger and acquisition activity fueled investor sentiment.

The Stoxx Europe 600 index closed 0.3% higher, bringing its weekly advance to 1.7%. The technology and healthcare sectors led the gains, while energy stocks were the worst performers of the session.

Shares of Goodwin Plc surged 9.8% after the company announced it is considering selling a majority of its mechanical engineering business. Meanwhile, Genel Energy Plc jumped 26% after rejecting a takeover offer from Norwegian oil and gas producer DNO ASA. On the other hand, satellite operator Eutelsat Communications SACA fell 4.6% after its earnings guidance fell short of market expectations.

The strong performance of the earnings season has reinforced investor confidence in economic growth, prompting a fresh wave of capital to flow back into European stocks. Data compiled by Bloomberg Intelligence shows that second-quarter profits for companies in the MSCI Europe index rose 17%, marking the largest increase since late 2022.

A report from Bank of America, citing EPFR Global data, revealed that European equity funds attracted $55 million in inflows during the week through Wednesday.

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