TLDR
- European equity markets rebounded Thursday, snapping a three-day losing streak
- The STOXX 600 index advanced 0.2% to reach 646.96, bouncing from its lowest level in a month
- French semiconductor materials firm Soitec rallied 10% following an upward revision to its revenue forecast to 50% YoY growth
- Deutsche Telekom shares climbed 1.7% after activist investor Elliott Investment Management disclosed a significant stake
- Crude prices declined but remained above the $90 per barrel threshold, maintaining inflationary pressures
European stocks recorded modest gains on Thursday as the worldwide bond market rout began to lose momentum. After enduring three consecutive days of declines, equity markets stabilized as selling pressure diminished.
The benchmark STOXX 600 index across Europe advanced 0.2% to settle at 646.96 as of 0810 GMT. The index had touched its lowest point in four weeks during the prior trading session.
Performance varied across individual European markets. Germany’s DAX index posted a 0.1% increase while Spain’s benchmark climbed 0.5%. Meanwhile, France’s CAC 40 index dipped 0.1%.
Soitec Surges on Upgraded Revenue Projections
Soitec, the French manufacturer of semiconductor substrate materials, emerged as the session’s top performer. The company’s stock surged 10%, leading all STOXX 600 constituents, following its decision to raise revenue growth projections for the second quarter of fiscal 2027 to 50% compared to the prior year. This marked a substantial upgrade from the company’s previous estimate of 30% growth.
The wider market had experienced significant pressure throughout the week. Escalating crude oil costs, driven by intensifying conflict involving Iran, amplified concerns about inflation and sparked simultaneous selloffs across both fixed income and equity markets.
European financial markets face particular vulnerability to elevated energy costs due to the continent’s substantial reliance on imported energy resources.
Crude oil prices moderated on Thursday following comments from President Donald Trump suggesting that additional strikes targeting Iran would probably be limited in scope and duration. Nevertheless, Brent crude continued trading above the $90 per barrel level.
According to Ricardo Castillo, who serves as head of investments at Mirabaud Group, consumers are currently facing energy product prices matching peaks observed in March and April. He noted this reinforces expectations that the European Central Bank will maintain elevated interest rates despite subdued economic expansion.
Government bond yields in the euro area retreated from their highest levels in several years, providing some support for equity valuations. Market participants are now assigning nearly certain probability to the ECB implementing a rate increase to 2.5% during its upcoming policy meeting next week.
Analysts anticipate two additional quarter-percentage-point rate increases by the middle of 2027.
Elliott Builds Position in Deutsche Telekom
Shares of Deutsche Telekom advanced 1.7% following news that Elliott Investment Management, known for its activist investment approach, has accumulated a substantial stake in the telecommunications giant. Elliott reportedly also communicated that Deutsche Telekom should abandon any potential merger plans with T-Mobile US, its American subsidiary.
Belgian investment holding company Sofina saw its shares climb 3.6% after publishing positive net asset value growth figures for the first half of 2026. The firm also disclosed that SpaceX represents the largest position within its primary private equity fund.
Shares of insurance and asset management firm M&G edged down 0.2% following the release of its first-half financial results.
Market participants are directing attention toward Friday’s US non-farm payrolls release. The employment data could significantly influence forecasts regarding the Federal Reserve’s monetary policy trajectory after hawkish remarks delivered by Fed Chair Kevin Warsh during the previous week.
Economic data from the eurozone showed services sector expansion decelerated to a two-month low in August, although combined private sector activity maintained a steady pace.
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