European Markets Rebound Strongly After Iran War-Induced Downturn
European markets are rebounding strongly after the Iran war-induced downturn in March. The STOXX 600 index is near record highs, company earnings are exceeding expectations, and the euro has reached a three-month peak.
The $2.44 billion inflow into European equities in the week to August 12 was the largest since February 25, just before the U.S.-Iran war broke out. This is largely due to the economy weathering the Iran war better than anticipated and a clearer monetary policy outlook versus other regions.
European equities have been protected from sharp swings in global tech shares due to their limited AI exposure. In comparison, investors that piled into tech-heavy South Korean stocks have had a wild ride with an almost 70% surge in the second quarter followed by a 20% slide so far this quarter.