European Shares Near Record Highs Amid Fiscal Boosts and Sector Diversification

European shares closed the abbreviated trading week on a high note, nearing record levels. The rise was driven by easing interest rates, Germany's fiscal spending, and diversification from US tech stocks. The STOXX 600 remained stable, highlighting gains in luxury and mining sectors despite thin market liquidity.

European shares concluded the holiday-shortened trading week on an upbeat note, approaching record highs and poised for their strongest annual performance since 2021. This surge was fueled by easing interest rates, a fiscal spending boost from Germany, and increasing diversification from highly-valued U.S. technology stocks.

The pan-European STOXX 600 remained steady at 588.61 on Wednesday. Meanwhile, London's FTSE 100 dipped by 0.2%, Spain's IBEX remained unchanged, and France's CAC 40 saw a slight decrease of 0.1%. Trading liquidity was limited as markets in Amsterdam, Brussels, and Paris closed early, and those in Germany and Milan were completely shut.

Luxury stocks led the gains, with Cartier-owner Richemont, LVMH, and Kering each rising around 1%. The mining sector also saw a boost as gold, silver, platinum, and copper prices hit record highs. In contrast, aerospace and defense stocks declined by 0.2%, though the sector remains one of this year's top gainers, with the index up nearly 56%.

(With inputs from agencies.)