Industrials, automakers drive European shares higher at close (updated)

Capgemini SE

04/12/2025 09:51

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Schneider Electric, Siemens Energy gain after JPM upgrade

JPM sees modest upside to Software & IT Services firms

Trump proposes slashing fuel economy standards, automakers jump

Philips bottoms the STOXX 600 after traders flag growth risks

Updates after European markets close

By Anastasiia Kozlova, Purvi Agarwal and Tharuniyaa  .

Dec 4 (Reuters) - European shares closed higher on Thursday, led by industrials and automakers, as global risk appetite improved on elevated U.S. rate cut expectations, while investors digested a mixed bag of corporate updates.

The pan-European STOXX 600 .STOXX rose 0.45% to 578.84 points at the close, its third session of gains.

Automakers .SXAP led sectoral advances, climbing 2.2%, with Porsche PSHG_p.DE and Mercedes-Benz MBGn.DE adding 5.7% and 4.4% respectively.

They were boosted after U.S. President Donald Trump on Wednesday proposed slashing fuel economy standards, in a push to make it easier for automakers to sell gasoline-powered cars.

Industrial stocks .SXNP also rallied 1.4%. Schneider Electric SCHN.PA and Siemens Energy ENR1n.DE gained 3.2% and 2.5%, respectively, after J.P.Morgan upgraded both companies' ratings to "overweight" from "neutral."

Those moves supported regional indexes, with those in Germany .GDAXI and France .FCHI up about 0.9% and 0.6%, respectively.

"There's finally a bit of good news for a sector that has struggled to make sustained headway in terms of real upside for quite some time... the loosening of regulation might just allow the sector a bit of breathing room," IG Chief Market Analyst Chris Beauchamp said.

INVESTORS CONFIDENT ON IMPENDING FED RATE CUT

The day's moves in the STOXX 600 were also driven by investor confidence that the U.S. Federal Reserve will cut interest rates next week.

U.S. weekly jobless claims, which fell to their lowest in more than three years, did little to alter rate-cut expectations.

"Risk appetite has recovered as markets price in the prospect of lower interest rates in the U.S., potentially a Federal Reserve chair next year who has a more dovish stance," said Fiona Cincotta, senior market analyst at City Index.

"There is a sense that the market is turning to a slightly more positive outlook, like the risk sentiment is improving."

Technology stocks .SX8P added 0.7%, with SAP SAPG.DE rising 1.7% after J.P. Morgan backed the stock with an "overweight" rating. Capgemini CAPP.PA, which jumped 4.2%, was reinstated at "neutral." The broker said it sees modest upside for European Software & IT Services.

European semiconductor stocks also jumped on Thursday. STMicroelectronics STMMI.MI and Soitec SOIT.PA advanced 3.4% and 2.7%, respectively.

CHINESE CHIPMAKER'S REPORT BOOSTS SECTOR'S OUTLOOK

Traders cited reports that Chinese chipmaker Cambricon planned to triple chip output to replace Nvidia NVDA.O in China's AI market, which boosted the sector's outlook.

Banks .SX7E recovered 1.1% after the previous day's losses, while defence stocks added 0.9% as investors monitored Ukraine peace talks. Trump said on Wednesday the path ahead for Ukraine peace talks is unclear.

Meanwhile, the heavyweight healthcare sector .SXDP underperformed with a 0.6% decline. Philips PHG.AS sank 5.6% after Citi flagged concerns about the medical technology company's 2026 growth expectations.

Among other stocks, Societe Generale SOGN.PA gained 3.2% after Goldman Sachs upgraded the stock to "buy" from "neutral."

Shares of some spirit makers fell, with Remy Cointreau RCOP.PA and Diageo DGE.L down 2.1% and 3.9% respectively, after UBS downgraded its rating on the stocks.

 (Reporting by Anastasiia Kozlova, Purvi Agarwal and Tharuniyaa Lakshmi; Editing by Rashmi Aich and Bernadette Baum)

 ((Anastasiia.Kozlova@thomsonreuters.com;))