European stocks briefly surpassed their August closing record as the Stoxx Europe 600 Index rose 0.5% by 10:52 a.m. in London, extending a rotation out of AI trades and a strong earnings season. Heavyweights HSBC Holdings Plc, Banco Santander SA, and SAP SE drove gains, while Rheinmetall AG plummeted up to 18% after cutting its 2026 sales target for the second time, citing Boxer armored vehicle delays.
The pan-European benchmark has outperformed the MSCI ACWI Index since October, set for its best relative quarterly performance since Q1 2025. Investors are shifting into defensive sectors like health care and consumer staples. Gold miners Endeavour Mining Plc and Pan African Resources Plc led performers as gold extended gains.
Third-quarter profits for the MSCI Europe Index are projected to grow over 32%, the best since early 2022. Analysts note Europe's valuations remain slightly below historic averages, supporting the rally. Market focus now turns to US midterm implications for Iran policy, tariffs, and renewables. The UK's FTSE 100 gained 0.7% ahead of an expected Bank of England rate hike of 25 basis points to 4%.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing