European stocks hit a record high as Stoxx 600 breaks above August peak

TechFlow reports, November 5, European stocks broke above their previous all-time closing high, extending their recent outperformance of global markets. The rally was driven mainly by investors rotating from AI trades into defensive sectors and a strong earnings season. The pan-European Stoxx 600 index rose 0.5%, surpassing the previous high set in August, led by mining and consumer goods stocks. Earlier, the clearer outcome of the U.S. midterm elections sparked a broad recovery in market risk appetite, and the index also posted a sharp gain on Wednesday.

In addition, international crude oil prices falling below $100 a barrel also supported European stocks. Since early October, the pan-European benchmark index has outperformed the MSCI All Country World Index and is on track to record its best quarterly relative performance since Q1 2025. As the AI trade frenzy subsides, investors have shifted into defensive sectors such as healthcare and consumer staples, benefiting European markets. Market focus will turn to how the U.S. midterm election results may affect the Iran war and tariff policies, and whether U.S. policy adjustments are expected to boost the renewable energy sector and potentially put pressure on the AI trade.

Source: TechFlow