European Stocks Rise as Tech Rally Outweighs Tariff Worries

(Bloomberg) — European stocks gained on Friday, rallying late in the session as gains across the technology sector and resources-related stocks outweighed lingering concerns over trade tariffs and recent political turmoil in France.

The Stoxx Europe 600 Index ended the session 0.6% higher as tech stocks rallied, with big oil and miners also adding to gains.

Deal-making news continued to drive moves among individual stocks. Anglo American Plc was a top gainer after Jefferies upgraded its rating on the mining firm to buy from hold, citing its mergers and acquisitions potential. Shares in Direct Line Insurance Group Plc rose for a second day following a Financial Times report that Aviva Plc has begun to reach out directly to shareholders of the insurer.

Delivery Hero SE shares reversed earlier losses after the food delivery firm set the price for its Middle Eastern unit’s initial public offering at the top of the range.

Meanwhile, euro-area inflation climbed above the European Central Bank’s 2% target, yet policy makers appear unlikely to be deterred from continuing to lower interest rates next month and beyond, based on statements by officials.

The region’s equities have gained just 1% this month as concerns over President-elect Donald Trump’s tariff plans and France’s budget woes have dented sentiment. US stocks have substantially outperformed Europe this year, with the S&P 500 Index up 26% in 2024 while the Stoxx 600 Index has only gained 6.5%.

S&P Global Ratings is set to review its credit rating of France late Friday. It cut its assessment of the country to AA- in late May — three notches below the top grade — citing its budget deficit. Since then, the situation has only deteriorated, and last month, both Fitch and Moody’s responded to the turmoil by assigning negative outlooks to their ratings.

“The European equity market is a bit complex in the sense that it suffers from a lack of visibility,” said Mabrouk Chetouane, head of global market strategy at Natixis Investment Managers. He noted that the main concerns for investors include Trump’s tariff plans as well as political upheaval in France and Germany.

For more on equity markets:

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• Deal Fever Warms Up the City: The London Rush

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–With assistance from Michael Msika.

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