European Stocks Surge as Market Sentiment Shifts

The STOXX 600 index reached new highs, buoyed by cyclical stock gains and delayed US rate hike expectations. Germany's DAX led with Siemens boosting its performance. Defence and financial stocks gained amid geopolitical tensions and economic resilience. French company Pluxee also posted strong results.

Europe's benchmark STOXX 600 index soared to a record high on Friday, with expectations of a delayed U.S. interest rate hike fueling the rise.

By 0709 GMT, the STOXX 600 stood at 651.52 points, marking its largest weekly increase since mid-May. Germany's DAX was a standout, climbing 0.9% to secure an all-time high, spurred by Siemens' significant 1.2% boost following a broker upgrade. Defence stocks also rose 0.8% as escalating tensions, notably Russia's intense strike on Ukraine, increased prospects for defence spending.

The rally, initially driven by tech stocks, has expanded to include sectors like industrials and financials, thanks in part to easing Middle East tensions and a disappointing U.S. jobs report that may prompt the Federal Reserve to delay rate increases. Additionally, global business activity reports underscored economic resilience. Meanwhile, France's Pluxee experienced a 6.4% rise after reporting a modest decline in third-quarter organic sales.