Europe’s STOXX breaks 600-mark for first time as Venezuela strikes lift defence shares
ASML shares rise after Bernstein upgrade
Defence stocks surge after US strikes on Venezuela
Copper price increase boosts mining companies
STOXX 600 closes up 0.94% at 601.76
Jan 5 (Reuters) – Europe’s equity benchmark broke through the 600 level for the first time on Monday, as U.S. strikes on Venezuela heightened geopolitical risk and drove investors into defence stocks.
The post-holiday bounce reflects market sentiment that defence budgets will head structurally higher, even after a recent dip in the sector, fuelled by ceasefire speculation between Russia and Ukraine.
Europe’s STOXX 600 (.STOXX), opens new tab ended above 600 points for the first time, up 0.9% at a record 601.76. The defence index (.SXPARO), opens new tab jumped 4.1% to its highest level in nearly three months.
Danni Hewson, head of financial analysis at AJ Bell, referring to the 600-point milestone said: “It demonstrates that, despite the geopolitical instability around the globe, investors feel confident in the way markets are progressing.”
The European energy index (.SXEP), opens new tab gained 0.8% as oil prices jumped by about 1%, with traders assessing the possible impact on oil flows from the U.S. capture of President Nicolas Maduro of Venezuela, home of the world’s biggest oil reserves.
“Venezuelan oil supply is unlikely to move global energy markets meaningfully in the near term. Even under optimistic assumptions, it will take years to rehabilitate the country’s energy sector,” said Landon Derentz, vice president of energy and infrastructure at Atlantic Council Global Energy Center, a think tank.
Apart from continuing to monitor the situation in Venezuela, investors are focusing on central banks and watching incoming data for clues on how quickly rate cuts could be delivered.
Shares of ASML (ASML.AS), opens new tab, the world’s biggest supplier of computer chip-making equipment, rose 6.8%. Analysts at brokerage Bernstein upgraded the stock to “outperform” from “market perform” and raised their price target on the stock to 1,300 euros from 800 euros.
Reporting by Niket Nishant, Avinash P and Pranav Kashyap in Bengaluru; Editing by Mrigank Dhaniwala, Ronojoy Mazumdar and Barbara Lewis
Niket Nishant reports on breaking news and the quarterly earnings of Wall Street’s largest banks, card companies, financial technology upstarts and asset managers. He also covers the biggest IPOs on U.S. exchanges, and late-stage venture capital funding alongside news and regulatory developments in the cryptocurrency industry. His writing appears on the finance, business, markets and future of money sections of the website. He did his post-graduation from the Indian Institute of Journalism and New Media (IIJNM) in Bengaluru.
