Markets
The French stock exchange jumps from “record to record”, says Bastien Bouchaud in Les Echos. The “Bourse de Paris” recorded its fourth record close in a row on Tuesday as strong corporate results kept investors buying. The latest bounce was prompted by rallies in industrial shares such as gas specialist Air Liquide and aerospace firm Safran.
The pan-European Stoxx 600 index is now just a few points short of regaining its January 2022 record. Germany’s DAX has also hit new highs after Commerzbank made its biggest annual profit in 15 years in 2023, say Shubham Batra and Amruta Khandekar on Reuters. Investors are betting that the European Central Bank will soon start cutting interest rates, which would be another tailwind for stocks.
America charges ahead
Europe’s rally has been little noticed because of ceaseless buzz about US technology stocks, says Sam Unsted on Bloomberg. “Nvidia, the poster-child for the artificial-intelligence story, has a bigger market capitalisation than the entire DAX.”
While the French and German markets have done well of late, they pale in comparison with the Nasdaq 100’s 45% gain in 12 months. Yet after such a strong run, Goldman Sachs’ analysts note that US valuations are now “quite literally, off the charts… even when you exclude Big Tech”.
The “Stoxx 600’s forward 12-month price-to-earnings ratio is near a record low relative to the S&P 500”, says Sagarika Jaisinghani, also on Bloomberg. European shares have beaten the S&P 500 just twice since 2014 (in 2017 and 2022). Although the artificial intelligence buzz and a more robust US economy are keeping most investors focused on
