TLDR
- The STOXX 600 rose 0.3% on Friday, hitting fresh record highs for a fourth straight week of gains
- Healthcare stocks led the way, rising 1.8%, with Genmab jumping 9.6% on strong results
- Kingspan surged over 15% after raising its profit forecast on surging data centre demand
- European companies are now expected to post Q2 earnings growth above 22%, the strongest since Q3 2022
- Markets stayed cautious ahead of US jobs data, with higher oil prices adding to inflation concerns
European stocks finished the first week of August on a high, with the STOXX 600 and STOXX 50 both hitting record levels for the fourth week running.
The STOXX 600 rose 0.3% to 659.91 points by mid-morning on Friday. The STOXX 50 gained 0.2% on the day and ended the week up 2.4%.
A busy earnings season was the main driver of gains. Companies across the index are now forecast to report second-quarter earnings growth of more than 22%, according to data from LSEG. That would be the strongest growth rate since the third quarter of 2022.
Healthcare Stocks Lead the Charge
Healthcare was the top-performing sector on Friday, rising 1.8%. Genmab led the way with a 9.6% jump after the cancer drugmaker reported higher first-half revenue and lifted its full-year outlook.
Novo Nordisk, Abivax and Zealand Pharma all posted gains of between 3.4% and 4.6%.
SAP shares rose almost 3%, while Rheinmetall added 2%. Novartis gained 1%, AstraZeneca rose 1.6%, and Airbus advanced 0.8%.
Czech defence firm CSG edged up 1.3% after reporting first-half revenue above expectations, helped by strong ammunition demand. The broader aerospace and defence index rose 0.9% for the day and was on track to be the week’s best-performing sector, up 5.8%.
Kingspan and Data Centre Demand Steal the Show
Kingspan was the standout performer of the day, surging over 15% after the building materials firm raised its full-year profit forecast. The company cited booming data centre demand as the key reason for the upgrade.
Not every stock fared well. Munich Re slid 2.7% despite reporting a 6% rise in second-quarter net profit that beat expectations. Stellantis dropped 2.5% after Bernstein cut the carmaker’s rating to underperform.
Markets were also keeping an eye on the Middle East. Brent crude futures rose to $83.17 a barrel on renewed concerns over the Strait of Hormuz, after Iran proposed banning certain vessels from the waterway.
Germany’s industrial production and export figures came in better than expected, adding a positive note on the data front.
Investors were cautious ahead of the US jobs report, with stronger employment numbers potentially giving the Federal Reserve more reason to hold off on rate cuts.
Gordon Kerr, European macro strategist at KBRA, said earnings are reinforcing the health of European corporate fundamentals, but added that markets are becoming more selective as high valuations leave less room for disappointment.
The STOXX 600 ended the week up 1.4%.
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