European shares extend gains after record-setting rally, unfazed by tensions (updated)
06/01/2026 09:55
Recasts with closing levels Germany's DAX and Spain's IBEX hit record highs STOXX 600 up 0.6% Goldman Sachs sees German fiscal stimulus boosting euro zone growth Investors largely look past geopolitical tensions By Niket Nishant and Pranav Kashyap Jan 6 (Reuters) - European shares scored another record close on Tuesday, after benchmarks in Germany and Spain climbed to all-time highs, as positive local economic data distracted investors from heightened international tensions. The pan-European STOXX 600 .STOXX ended last year with its strongest advance since 2021, fueled by easing interest rates and increased defence spending. While analysts expect this year's returns to be more measured, they also expect the market to keep growing. On Tuesday, Goldman Sachs lifted its 12‑month target for the STOXX 600. The index closed up 0.6%, a day after piercing the 600‑point level for the first time. "We're becoming a bit inured to the environment of heightened uncertainty," said Matthew Sherwood, senior global economist at the Economist Intelligence Unit. "There's still guarded optimism. And there are things afoot that are supportive of growth." INFLATION DATA IN FOCUS Among regional bourses, Germany's DAX index .GDAXI and Spain's IBEX .IBEX edged up after hitting record highs in early trading, while the benchmark index in Italy .FTMIB slipped 0.2%, paring gains after a new peak. Inflation cooled more than economists expected across several of the euro zone's biggest economies last month, even as growth held steady, reinforcing the view that price pressures have faded and the bloc is surprisingly resilient. In Germany, the region's largest economy, inflation eased to 2.0% from 2.6%, undershooting forecasts of 2.2%. In France, inflation dipped to 0.7% from 0.8%, while Spain's rate edged down to 3.0% from 3.2%. Policymakers have signalled that there was no appetite to lower interest rates any further. "We'll see perhaps a more dovish view from the ECB that gives it a bit more room to even not necessarily cut, but certainly talk about being more accommodative in the short term," said IG chief markets strategist, Chris Beauchamp. HEALTHCARE STOCKS AMONG THE WINNERS The healthcare index .SXDP rose 3%, hitting its highest since March last year. Danish obesity drugmaker Novo Nordisk NOVOb.CO led with gains of 5%. The company launched its Wegovy pill in the U.S. on Monday, intensifying competition with rival Eli Lilly LLY.N. AstraZeneca and Novartis rose 4.9% and 2.8% respectively. Basic resources .SXPP also added 2% and was hovering near levels not seen since 2022. Among individual stocks, InPost INPST.AS jumped nearly 30% after the parcel locker company said it had received an indicative proposal regarding the potential acquisition of all its shares. Adidas ADSGn.DE slumped 3.6% after Bank of America double-downgraded the sportswear retailer to "underperform" from "buy", citing expectations of slower sales growth. (Reporting by Niket Nishant, Avinash P and Pranav Kashyap in Bengaluru; Editing by Sherry Jacob-Phillips, Vijay Kishore and Barbara Lewis) ((Niket.Nishant@thomsonreuters.com;pranav.kashyap@tr.com))