By Nikhil Sharma
(Reuters) -European shares reached a record high on Friday, led by technology and healthcare stocks, as strong earnings from big names like Novartis overshadowed concerns over weaker economic recovery.
The pan-European STOXX 600 index was up 0.4%, as of 0950 GMT, after the benchmark closed at a record peak on Thursday, following the European Central Bank’s (ECB) interest rate cut and dovish outlook.
Technology added nearly 1.6%, boosted by a 7.6% jump in industrial technology group Hexagon after it posted a surprise rise in fourth-quarter operating profit.
Computer chip equipment maker ASML also lifted the sector, gaining 3%, as it sustained its positive run from its robust earnings on Wednesday.
Heavyweight healthcare added 1%, with Novo Nordisk rising 1.4% along with Novartis gaining 3.4%, after the company posted quarterly adjusted net income that exceeded expectations due to strong sales of its heart failure drug Entresto and multiple sclerosis drug Kesimpta.
The benchmark index was on track for its fourth consecutive session of record gains, as well as sixth straight weekly rise, its longest such streak since March 2024.
The equities overcame Monday’s global market rout triggered by Chinese firm DeepSeek’s low-cost AI model, prompting investors to question the sky-high valuation of AI bellwethers.
The ECB cut interest rates on Thursday and signalled a further reduction in March as concerns over lacklustre economic growth superseded persistent inflation.
“European stocks are navigating toward uncharted territories despite the growth concerns and that could be well basically put on the back of stronger-than-expected earnings and also the hope and expectation that European Central Bank is and will remain supportive this year,” said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank.
Traders see about 72 basis points worth of rate cut this year.
Data on Thursday showed euro zone economy stagnated last quarter, fuelling fears that a long-predicted recovery could be further delayed.
On Friday, inflation fell in five important German states in January, suggesting Germany’s national inflation rate could decline this month, although it was expected to remain unchanged.
Germany’s benchmark index was up 0.3% to trade at an all-time high, and the country’s two-year bond yield, more sensitive to ECB rate expectations, fell 7 bps to 2.12%.
Germany’s unemployment rate, however, rose at the start of the year, while retail sales fell unexpectedly by 1.6% in December compared with the previous month.
Investors were also unsettled as they neared Trump’s Feb. 1 deadline, the day when he is expected to issue trade duties on Mexico and Canada.
Trump did threaten the European Union with import duties, but his restraint in providing more details has maintained some confidence in the bloc.
Bucking the trend, telecommunications lost 0.5% as Finnish telecom Elisa fell over 4% on missing fourth-quarter profit estimates.
(Reporting by Nikhil Sharma; Editing by Eileen Soreng and Vijay Kishore)
