STOXX 600 jumps over 1% to one-week high on real-estate boost

By Ankika Biswas, Joao Manuel Vicente Mauricio and Pranav Kashyap

(Reuters) -European real estate stocks surged, propelling the benchmark index to a one-week high on Friday, while easing of geopolitical tensions also relieved some recent selling pressure.

The pan-European STOXX 600 jumped 1.2%, its best daily performance in nearly two months.

The session's positive performance contributed to a 1.1% gain for the index this week, breaking a four-week losing streak which was the longest since May 2022.

The index had lost over 4% in the past four weeks due to a combination of factors, including rising uncertainty over the Ukraine-Russia conflict, likely economic implications of U.S. President-elect Donald Trump's proposed tariffs, and domestic growth-related woes.

The benchmark index is up about 5% for the year, sharply lagging the U.S. S&P 500 's near 25% jump.

"The outlook for Europe compared to the U.S. is actually pretty grim," said Stefan Koopman, senior market economist at Rabobank, citing poor export and industrial demand perspectives.

Data showed euro zone business activity took a surprisingly sharp turn for the worse this month, owing to contractions in the services industry and manufacturing sinking deeper into recession.

Germany's economy grew less than previously estimated in the third quarter, with the country set to be the worst performer among the Group of Seven rich democracies this year.

Rate-sensitive real estate stocks were the biggest boost on the STOXX 600. A lower interest rate environment leads to lower costs of borrowing, in turn boosting house sales.

Banks were the biggest drag, limiting gains on the index, losing 1.3%.

"The latest flash PMIs suggest that while industry continues to struggle across advanced economies, services activity is now slowing in Europe too," analysts from Capital Economics said in a note.

Meanwhile, "protectionist policies from the U.S. next year will have only a small economic impact on Europe, but the fallout will vary between countries and there are risks of greater damage if the trade conflict escalates," they added.

The tech index rose 1.3%, led by chip stocks. The sector ended Thursday higher on confidence in the AI boom despite investor disappointment over U.S.-based Nvidia (NASDAQ:NVDA )'s revenue forecast.

Other sectors such as media and healthcare were also up over 2.7% each.

Miniature war game maker Games Workshop Group jumped 17.2%, hitting record highs, after an upbeat half-year forecast.

Brenntag rose 4.4% after Berenberg upgraded the chemicals distributor's stock to "buy" from "hold."

Soitec (EPA:SOIT ) extended gains for the second day, up 7.2% on Friday, after the French semiconductor materials supplier reiterated its 2025 outlook.

Thales (EPA:TCFP ) fell 2.8% on Britain's Serious Fraud Office's investigation of suspected bribery and corruption at the company jointly with French authorities.



French infrastructure and technology company Technip (EPA:FTI ) Energies fell for the second day, down 3.8% on Friday, after setting out its short-term and medium-term targets.

Nexans (EPA:NEXS ) SA dropped 3% after the sale of a 5% stake in the French cable maker by Chile's richest family.

Source: Investing.com