European Stocks Snap Four-Day Winning Streak; Alstom Slides
European stocks fell for the first time in five sessions as traders paused for breath after a rally spurred by trade optimism. Alstom SA slumped 17% as softer guidance overshadowed solid earnings.
The Stoxx Europe 600 Index dropped 0.2% by the close. Consumer products and health care stocks lagged while banks and construction shares outperformed. Burberry Group Plc jumped 17% after reporting better-than-expected retail sales in the fourth quarter and announcing job cuts.
The main regional index is up over 7% so far this year, recovering all of its losses since US President Donald Trump unleashed his trade tariffs on April 2. The trade negotiations between the US and China have also boosted investor sentiment.
“Europe today is requiring more earnings growth to satisfy rising valuations,” said Shaniel Ramjee, co-head of multi-asset in London at Pictet Asset Management. “We think that economic growth needs to pick up in the region to really sustain the rally.”
Goldman Sachs Group Inc. strategists led by Sharon Bell raised their targets for the Stoxx Europe 600 index as easing trade tensions lowered recession risks. However, the team doesn’t expect European equities to stage another big rally as they are no longer looking cheap.
Source: Bloomberg
