(Bloomberg) — European stocks rose, with defensive sectors such as health care and real estate outperforming amid lingering worries around artificial intelligence.
The Stoxx Europe 600 Index was up 0.4% by the close. Banking and insurance stocks also gained, while miners were the biggest laggards following a slide metal prices. Oil dropped, dragging energy shares lower on signs that the US and Iran have made progress in nuclear talks.
Investors have been shifting to European markets to find safety from the turmoil stemming from American tech shares and worries that AI will upend the software industry. Bank of America Corp.’s latest fund manager survey showed that a growing number of investors think the structural underperformance of Europe’s equity markets is over.
Bank of America strategists led by Andreas Bruckner cited data showing that a record 74% of investors see European growth accelerating in the near-term as German fiscal stimulus boosts macro data. The percentage of investors expecting greater upside for European cyclicals over defensives is close to a one-year high, they wrote.
“Weak liquidity from the US long weekend and Lunar New Year creates a difficult technical backdrop, and heightened geopolitical risk sentiment has crept into markets too,” said Emma Moriarty, portfolio manager at CG Asset Management. “But expectations of easier global financial conditions suggest that operating conditions might be turning more favorable for European companies.”
In the UK, the export-heavy FTSE 100 Index rose 0.8% as the pound weakened after economic data showed the unemployment rate rose to a near five-year high.
Meanwhile, Aroundtown SA jumped 4.8% after Viceroy Research said it’s long on the real estate company, calling the stock “deeply undervalued.” Copper miner Antofagasta Plc fell 3.4% after its earnings and dividend underwhelmed some analysts.
Kerry Group Plc declined 6.4% as the Irish food producer posted below-consensus volume growth in the EMEA and APAC markets and headwinds from exchange rate moves.
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–With assistance from Jan-Patrick Barnert, Sagarika Jaisinghani, Charles Riley and Michael Msika.
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