Europe: Stocks log record close, boosted by financials, US shutdown relief

EUROPEAN shares logged a second consecutive record close on Wednesday, boosted by financials as investors were relieved by a potential end to a historic US government shutdown and weighed a series of corporate updates.

The pan-European Stoxx 600 index ended up 0.71 per cent at 584.23 points.

France’s CAC 40 gained 1 per cent, while Spain’s IBEX added 1.4 per cent.

Investors globally were hopeful that the US House of Representatives could soon vote to end a government shutdown that had halted economic data that is crucial for policymakers.

Although concerns linger over the impact it could have had on the world’s largest economy, expectations are that any signs of a weakening US labour market could nudge the Federal Reserve to take a more dovish outlook on monetary policy.

Talking about US shutdown relief hopes, Nick Saunders, CEO of stock trading platform Webull UK said, “that’s the underlying reason for the positive sentiment...but beyond that, a lot of the rise (in European markets) has actually been earnings driven. We’ve seen some good reports this morning...it’s these good earnings figures that are driving the markets up.”

“In particular, we see banks doing well in Europe. The bank-heavy indices, the CAC and the IBEX, are really pushing ahead and taking the whole of the European markets with them.”

Banks were the biggest boost to the Stoxx index with ABN Amro rising 2.6 per cent after the Dutch lender announced upbeat quarterly earnings and that it had acquired domestic commercial lender NIBC Bank to strengthen its position in its home market.

European financial stocks have outperformed the broader market on annual price returns, helped primarily by better-than-expected earnings. Banks-heavy bourses in Spain and Italy have starkly outperformed the region’s Stoxx benchmark this year.

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STI continues rally on Wednesday’s close

European healthcare stocks added 1.1 per cent, while energy stocks fell 0.6 per cent.

On Wednesday, Britain’s SSE topped the Stoxx index with a 16.8 per cent gain after unveiling a £33 billion pound (S$57.7 billion) five-year investment plan as it seeks to upgrade the UK’s regulated electricity networks and bolster its renewables business.

Infineon gained 6.9 per cent after the German chipmaker lifted its full-year sales forecast for chips used in AI data centres.

RWE rose 9.1 per cent after it reported higher-than-expected profit for the first nine months of the year.

On the flip side, FLSmidth & Co shares fell 8.5 per cent after it reported quarterly order intake below expectations and warned of project delays that affected its guidance.

French voucher provider Edenred slid 4 per cent after it warned that it would cut 2026 profit guidance if the planned regulatory changes to the meal and food voucher system in Brazil were implemented.