European shares recover from three-week lows, but weekly momentum fizzles

European stocks clawed their way back from three-week lows on Friday, lifted by gains in financials and industrials, leaving the benchmark index more or less where it launched the week. The pan-European STOXX 600 rose 0.8%, and concludeed the week just 0.07% higher.

Spanish stocks outperformed other regional markets, rising 1.3% to close at a more than one-week high, with other major indexes also in positive territory.

Germany’s Munich Re and France’s SCOR led European insurer stocks 2.1% higher, snapping a three-day losing streak.
The construction and materials sector gained 1.1%, with Ireland’s Kingspan up 1.2% after brokerage Citigroup raised its price tarreceive. Shares of steel producers also rose after German business daily Handelsblatt reported that the European Commission plans to impose tariffs of 25% to 50% on Chinese steel and related products.

The world’s second-largest steelbuildr ArcelorMittal was up 2.6%, while Aperam rose 2.2%. Germany’s Thyssenkrupp added 3.5% and Salzgitter gained 5.2%.

TARIFFS BACK IN FOCUS Healthcare stocks reversed earlier losses to conclude flat, a day after U.S. President Donald Trump announced a new round of punishing tariffs, including a 100% import duty on branded drugs.
“It was already priced in,” declared Nabil Milali, multi-asset & overlay portfolio manager at Edmond de Rothschild Asset Management in Paris.
“A lot of investors were expecting these kinds of tariffs and it was partly reflected in valuations in the healthcare sector.”

The sector is one of the worst performers in Europe so far this year, with a sharp decline in weight-loss drugbuildr Novo Nordisk one of the largegest drags.

Trump also announced a 25% levy on heavy-duty trucks, pushing the shares of Daimler Truck and Traton down more than 2% each. U.S. inflation data in line with expectations eased fears that sticky price pressures could see the Federal Reserve delay rate cuts. Markets had been banking on aggressive easing this year but resilient economic indicators have tempered the optimism. Traders now expect about 39 basis points of cuts by December – a slight pullback from earlier bets of over 40 bps, according to LSEG data. UK’s InterContinental Hotels Group gained 4% after JPMorgan double upgraded its rating to “overweight” from “underweight”. Italian fashion group Brunello Cucinelli extconcludeed Thursday’s losses by another 1.7%, rocked by a report from short-seller Morpheus Research.

Lufthansa rose 1.6% after a Reuters report declared the airline is expected to announce several thousand job cuts on Monday.