European Stocks Hit Record Highs, Major Sectors Mixed
European stock indexes closed mixed on Thursday (June 18), as sentiment stemming from lower inflation risks offset pressure on several major sectors. The Euro STOXX 50 rose 0.5% to a new record of 6,331, while the STOXX Europe 600 fell 0.4% to 637.
Market support came after US President Donald Trump signed a memorandum of understanding with Iran. The agreement suspended hostilities for 60 days and restored the flow of fuel tankers through the Strait of Hormuz, helping to suppress energy prices.
The decline in energy prices eased concerns that the European Central Bank would need to raise interest rates further this year. In market transmission, cheaper energy could ease inflation, suppress yields, and provide room for stock valuations to remain supported.
The banking sector mostly gained after leading gains throughout the week. UniCredit and Intesa Sanpaolo each rose 0.7%. Industrial stocks also moved strongly, with Airbus, Safran, and Schneider Electric gaining around 3%.
Chip stocks also provided support after Infineon surged 7%, tracking a rally in global semiconductor manufacturers. However, pressure emerged from SAP, which fell 4.7% due to weakness in the software sector, while German automakers, as well as UK pharmaceutical and mining stocks, also weakened.
The market's next focus will be on the sustainability of the US-Iran deal, the direction of energy prices, and ECB policy signals. As long as inflation risks subside but sector rotation remains sharp, European indices have the potential to move selectively, even though the Euro STOXX 50 has set another record.
Source: Newsmaker.id
