European shares moved higher on Tuesday as a calmer bond market helped investors regain confidence following last week’s sharp sell-off in government debt.
The STOXX Europe 600 rose around 0.5%, building on three consecutive sessions of gains as French government bond yields stabilised. Germany’s DAX gained 0.4%, France’s CAC 40 rose 0.2% and Spain’s IBEX 35 increased 0.7%.
The improvement in sovereign debt markets is providing a more supportive backdrop for European equities. French government bond yields had risen sharply last week, pushing the spread between French and German borrowing costs towards crisis-era levels and weighing on equity valuations.
That pressure eased on Tuesday following the release of France’s draft 2027 budget, allowing investors to focus more closely on individual companies and upcoming economic data.
Healthcare was one of the strongest areas of the market, rising 1.6%, with Genmab providing a major boost to the sector. Shares in the Danish biotechnology company gained 7.6% after positive late-stage trial results for its blood cancer treatment developed with AbbVie.
The results showed the treatment reduced the risk of disease progression or death, giving Genmab one of the strongest performances among European stocks and providing fresh momentum to the healthcare sector.
The wider market is also benefiting from a reduction in energy-related pressure. Oil prices fell almost 2% overnight as signs of improving Middle East export flows helped ease concerns over potential supply disruption. Saudi Arabia has resumed operations on its East-West Pipeline and Red Sea loadings from Yanbu, while G7 countries have pledged to coordinate potential strategic reserve releases and increase supply flows.
Lower energy prices could provide some relief for European companies facing elevated input costs, while also reducing pressure on inflation expectations.
JPMorgan European Discovery Trust plc is an investment trust company. The Investment Trust JEDT objective is to achieve capital growth from a portfolio of quoted smaller companies in Europe, excluding the United Kingdom.
