[BENGALURU] European shares closed higher on Thursday (Dec 4), led by industrials and automakers, as global risk appetite improved on elevated US rate cut expectations, while investors digested a mixed bag of corporate updates.
The pan-European Stoxx 600 rose 0.45 per cent to 578.84 points at the close, its third session of gains.
Automakers led sectoral advances, climbing 2.2 per cent, with Porsche and Mercedes-Benz adding 5.7 per cent and 4.4 per cent respectively.
They were boosted after US President Donald Trump on Wednesday proposed slashing fuel economy standards, in a push to make it easier for automakers to sell petrol-powered cars.
Industrial stocks also rallied 1.4 per cent. Schneider Electric and Siemens Energy gained 3.2 per cent and 2.5 per cent, respectively, after JPMorgan upgraded both companies’ ratings to “overweight” from “neutral.”
Those moves supported regional indexes, with those in Germany and France up about 0.9 per cent and 0.6 per cent, respectively.
“There’s finally a bit of good news for a sector that has struggled to make sustained headway in terms of real upside for quite some time… the loosening of regulation might just allow the sector a bit of breathing room,” IG Chief Market Analyst Chris Beauchamp said.
Investors confident on impending Fed rate cut
The day’s moves in the Stoxx 600 were also driven by investor confidence that the US Federal Reserve will cut interest rates next week.
US weekly jobless claims, which fell to their lowest in more than three years, did little to alter rate-cut expectations.
“Risk appetite has recovered as markets price in the prospect of lower interest rates in the US, potentially a Federal Reserve chair next year who has a more dovish stance,” said Fiona Cincotta, senior market analyst at City Index.
“There is a sense that the market is turning to a slightly more positive outlook, like the risk sentiment is improving.”
Technology stocks added 0.7 per cent, with SAP rising 1.7 per cent after JP Morgan backed the stock with an “overweight” rating. Capgemini, which jumped 4.2 per cent, was reinstated at “neutral”. The broker said it sees modest upside for European Software & IT Services.
European semiconductor stocks also jumped on Thursday. STMicroelectronics and Soitec advanced 3.4 per cent and 2.7 per cent, respectively.
Chinese chipmaker’s report boosts sector’s outlook
Traders cited reports that Chinese chipmaker Cambricon planned to triple chip output to replace Nvidia in China’s AI market, which boosted the sector’s outlook.
Banks recovered 1.1 per cent after the previous day’s losses, while defence stocks added 0.9 per cent as investors monitored Ukraine peace talks. Trump said on Wednesday the path ahead for Ukraine peace talks is unclear.
Meanwhile, the heavyweight healthcare sector underperformed with a 0.6 per cent decline. Philips sank 5.6 per cent after Citi flagged concerns about the medical technology company’s 2026 growth expectations.
Among other stocks, Societe Generale gained 3.2 per cent after Goldman Sachs upgraded the stock to “buy” from “neutral”.
Shares of some spirit makers fell, with Remy Cointreau and Diageo down 2.1 and 3.9 per cent respectively, after UBS downgraded its rating on the stocks. REUTERS
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