European equities advanced to record levels on Friday, extending recent gains even as industrial data showed signs of contraction. The STOXX Europe 600 closed at an all-time high, rising 0.97% and marking its best session since mid-December. This move highlights a notable divergence between market valuations and macroeconomic indicators, with investors choosing to lean into sectors positioned for defensive strength and interest rate sensitivity.
London’s FTSE 100 also closed at a record high, with financials and healthcare leading the charge. While commodity-linked names faced selling pressure due to falling prices in oil, silver, and copper, overall sentiment remained constructive. The downturn in materials was not enough to dampen enthusiasm for equities more broadly, as capital flowed into companies perceived as less exposed to cyclical headwinds.
Investors appeared to brush off weak factory activity, particularly in Germany and other key eurozone economies. Instead, markets took a forward-looking stance, reflecting optimism that monetary policy would remain supportive and that inflation was continuing to ease. Declining expectations for further interest rate hikes helped to buoy equity valuations, especially in interest rate-sensitive sectors such as banking and real estate.
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.
