European stocks rally, diverging from U.S. tech slump

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European stocks enjoy best day in nearly a month

Down 1.9% last week, the Stoxx Europe 600 SXXP, +1.66% rose 1.7%. Software giant SAP SAP, +2.98%, pharmaceutical AstraZeneca AZN, +3.89% and chemicals company Linde LIN, +2.79% paced a broad-based advance. That was the best one-day gain since Aug. 11.

Last week the tech-dominated Nasdaq Composite COMP, -1.26% lost 3.2%, its worst decline since the period ending March 20, and first drop after five consecutive gains. “There was no specific trigger to the selloff but after extreme bullishness driven by monetary and fiscal policies, stock prices reached levels that could no longer be justified by fundamentals,” said Hussein Sayed, chief market strategist at FXTM. “Liquidity and low interest rates alone cannot be the solution to everything, so it’s essential to see continued improvement in economic data and an end to the pandemic for sustainable upside in risk assets.

The pound GBPUSD, -0.82% weakened after the Financial Times reported the U.K. was working on legislation to override parts of the Brexit withdrawal agreement. The Sunday Express separately reported a dossier is being considered by Downing Street that would seek to limit access for European Union companies seeking to raise money in London. Talks on a post-Brexit U.K.-European Union trade deal are due to restart on Tuesday.

 

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