A powerful and defiant wave of optimism has once again swept across European markets, with stocks opening higher on Friday and the regional benchmark index building on a stunning run that has already seen it smash through to a new all-time high.
This relentless, tech-fueled rally is now in its fifth consecutive day, a powerful show of force from a market that is boldly shrugging off the political chaos of a US government shutdown and a world of simmering geopolitical risks.
The buying has been broad-based and decisive. The pan-European Stoxx 600 climbed another 0.4 percent in early London trading, a move that has put it on course for a weekly gain of over 2 percent.
Major bourses across the continent are all in the green, with London’s FTSE 100, which also hit its own record high this week, adding another 0.3 percent.
The OpenAI effect: an AI boom lifts all boats
The engine of this powerful ascent is a revitalized and supercharged technology sector.
The entire global tech world is still buzzing from the news of an OpenAI share sale that valued the privately-owned AI behemoth at a staggering 500 billion dollars.
This monumental valuation has served as a powerful new catalyst, breathing fresh life into the AI trade and sending tech stocks soaring on both sides of the Atlantic.
The Stoxx Europe 600 Technology index is now on track for a spectacular weekly gain of 4.9 percent, a clear sign of the market’s deep conviction in the enduring power of the AI revolution.
A world of contrasts: a shutdown, a drone wall, and a bull market
This powerful rally is taking place against a complex and often contradictory global backdrop.
Investors are continuing to monitor the US government shutdown, now in its third day, with US Treasury Secretary Scott Bessent having warned on Thursday that the political impasse could directly hurt American economic growth.
At the same time, a new and tangible geopolitical tension is taking shape in Europe.
Regional leaders, who congregated in Copenhagen this week, are actively discussing the possibility of building a “drone wall” to deter Russian aircraft from violating the continent’s airspace.
This prospect of a new, high-tech iron curtain has sent defense stocks climbing, with the Italian aerospace firm Avio leading the sector with a 3.5 percent gain.
This strange mix of market euphoria and geopolitical anxiety was perfectly encapsulated on Friday, when Munich airport was briefly forced to close after drone sightings brought all flights to a halt.
It is a potent symbol of the new and unpredictable world that investors are now forced to navigate. For now, however, the bulls are firmly in control, and the rally is showing no signs of slowing down.
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