- Stoxx 600 hit a new record this month
- Just a handful of companies are driving the index
Europe’s equity markets have outperformed expectations so far this year but, as in the US, growth has been driven by just a narrow group of companies. These European giants were strong enough to pull the benchmark Stoxx 600 index to an all-time high last week, although this is not a sign of growth overall for the continent.
The gain is more "stock-specific than macro-driven”, said Maximilian Uleer, Deutsche Bank’s head of European equity and cross-asset strategy. It can largely be attributed to the performance of just four major companies – Danish pharma giant Novo Nordisk (DK:NOVO.B), Dutch chip-making equipment supplier ASML (NL:ASML), French luxury group LVMH (FR:MC) and German software specialist SAP (DE:SAP). They have been responsible for more than half of this year’s gains. The expanded group (the cutely named 'Granolas') also includes GSK (GSK), Roche (CH:RO), Novartis (CH:NOVN), L’Oreal (FR:OR), Astrazeneca (AZN) and Sanofi (FR:SAN). Overall, they have contributed 60 per cent of the Stoxx 600’s 12-month gain of 12 per cent.