European stock markets rebounded on Thursday, with healthcare stocks advancing, led by gains in Abivax SA and Zealand Pharma A/S.
The Stoxx Europe 600 index closed up 0.5%, recovering from earlier losses. The healthcare, financial services, and retail sectors were the top performers, while mining and telecommunications stocks were the weakest.
Abivax surged 18%, following a sharp decline earlier in the week triggered by cancer cases in a key clinical trial. Analysts at Stifel suggested the market's initial reaction was "overdone."
Within the healthcare sector, Zealand Pharma also saw a significant gain of 9%. This followed Deutsche Bank raising its price target on the stock after positive results for its experimental weight-loss injection, survodutide.
Among other notable movers, cognac producer Rémy Cointreau rose 9.8% after strong growth in the Americas helped offset weakness in European demand. Puma shares also gained after Citigroup upgraded its rating to Buy.
European equities have risen over 5% year-to-date, yet they continue to trail the rallies in US and Asian markets, which have greater exposure to the artificial intelligence theme. The Stoxx 600 index remains below the record high set in February.
"Investors have already built significant positions in sectors and regions with the strongest earnings outlook, such as the US, South Korea, and the tech sector, and withdrawn from markets and sectors with weaker earnings, such as Europe, healthcare, and consumer staples," said Marija Veitmane, Head of Equity Research at State Street Global Markets. "Now we are waiting for the next earnings season to see if earnings have a chance to broaden beyond the IT sector, so we can build positions there."
Technology stocks rallied in late trading, erasing earlier losses that were driven by Broadcom's disappointing AI chip revenue forecast. This had caused a basket of AI winner stocks tracked by UBS Group to fall 1.6%, though that basket is still up over 40% for the year.
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