European stocks saw an uptick yesterday, nearing a five-month peak as investors brushed aside concerns over rising inflation in the United States, bolstered by strong corporate earnings reports.
During the trading session, the Stoxx 600 index advanced by 0.2%, driven by gains in mining and chemical sectors. Overall, global equities rose despite data indicating an increase in producer prices in the U.S., which tempered expectations that the Federal Reserve might cut interest rates by 50 basis points in the coming month.
Despite weak economic data from China suggesting trade-related impacts, Danish energy cable solutions firm NKT saw its shares soar by 9.1% after it updated its full-year financial projections.
Conversely, shares of ASML decreased by 1.5%, pressured by Applied Materials, the largest supplier of semiconductor manufacturing equipment, which lowered its fourth-quarter earnings forecast due to declining demand from China and uncertainties surrounding tariffs.
The Dutch company previously issued a similar warning in mid-July, indicating the possibility of no growth in 2026. Shares of BE Semiconductor fell by 0.7%, while ASM International slipped by 1.1%.
Pandora, the Danish jewelry maker, recorded the largest decline on the Stoxx 600, plummeting by 11.9% after its core revenue figures for the second quarter fell short of estimates.
Japanese Gains
The Nikkei index concluded the session at an all-time high amid a weaker yen, supported by data reflecting the strength of the Japanese economy surpassing expectations.
The pace of the Nikkei’s increase accelerated in the afternoon session, rising by 1.7% to close at a record 43,378.31 points, having touched a session high of 43,451.46 points earlier in the week.
The broader Topix index climbed 1.6%, reaching a record high close of 3,107.68 points. The overnight decline of the yen benefited exporting companies, while data released on Friday indicated the Japanese economy grew at a year-on-year rate of 1% from April to June, exceeding forecasts. Analysts expect the full impact of U.S. tariffs on growth to emerge later on.
Bond Yields
Wataro Akiyama, an economist at Nomura Securities, stated that rising U.S. Treasury yields and remarks by U.S. Treasury Secretary Scott Pessen on Thursday suggesting a potential interest rate hike by the Bank of Japan contributed to the surge in financial stocks.
The banking sector emerged as the biggest winner on the Topix, with the sub-index soaring 4.7% to its highest level since May 2006. Shares of Mitsubishi UFJ Financial Group jumped 6%, marking gains for the eighth consecutive session to achieve a record high. In the Nikkei, 177 stocks advanced, while 46 faced declines.