India-EU Deal a "Booster," Stoxx 600 Rises
European stocks rallied and closed the session on Tuesday (January 27) on a positive note after the European Union and India finally sealed a free trade agreement, ending nearly two decades of negotiations. The deal came at a perfect time: relations between Europe and Washington are at a sensitive time, so news of a "new market gateway" immediately boosted sentiment.
The Stoxx Europe 600 Index rose 0.6% at the close, with the banking sector the main driver. HSBC also stole the spotlight after its valuation hit a major milestone—helped by positive sentiment from analyst upgrades. Media and automotive stocks, on the other hand, weighed on the rally, indicating a more selective approach: investors were choosing sectors deemed "resilient" amid global uncertainty.
At the individual stock level, corporate drama also lifted the market mood. Puma jumped after China's Anta Sports agreed to acquire a large stake, while Siegfried surged after expanding its pharmaceutical raw materials business footprint through the acquisition of several new facilities in the US and Australia. This movement confirms one thing: when the market is searching for direction, stories of corporate action and expansion remain a magnet.
This strengthening is also seen as Europe's attempt to "get back on its feet" after being shaken last week by concerns about a trade war with the US. However, the euphoria remains under control, as the market's focus now shifts to two major events: earnings season and the Fed's decision on Wednesday. Investors want to see whether corporate profits remain strong enough to withstand valuation pressures and geopolitical risks.
From a fundamental perspective, profit projections for European issuers are still growing, but the pace is expected to slow compared to the previous quarter. However, that's precisely where the psychology plays a role: already low expectations create more room for a "positive surprise"—as long as the results aren't as bad as feared.
One example of positive sentiment comes from Cranswick, which rallied after the company signaled that annual profits were likely to be above market expectations, driven by strong third-quarter sales, including during the Christmas period. The message is clear: amidst noisy global headlines, investors will continue to pursue stocks that can demonstrate real performance.
Source: Newsmaker.id
