European stocks gained as bank shares rebounded, after posting their biggest weekly decline since April on worries about disruption from artificial intelligence.
The Stoxx Europe 600 Index advanced 0.3% as of 8:28 am in London. Along with banks, insurance-related stocks outperformed while basic resources and chemicals shares led declines.
Investor sentiment was also lifted following Friday’s US data that showed slowing inflation, reinforcing investor conviction the Federal Reserve could cut interest rates at least twice this year.
In individual stocks, NatWest Group Plc rose 4% after Citigroup Inc. Analysts raised their target for the UK lender to a street-high. German online broker flatexDEGIRO SE fell 5% after its rating was downgraded to neutral from outperform at BNP Paribas.
Europe’s benchmark index is wavering below last week’s record high amid a mixed earnings season, which has been marked by overall healthy profit growth yet strong reactions from investors on companies that didn’t live up to expectations. AI disruption fears have also hit various corners of the market, as mentions of the term during management calls has nearly doubled compared to the previous quarter.
“The perception of AI seems to have changed completely from the angel of mercy to the kiss of death,” said Stephan Kemper, chief investment strategist at BNP Paribas Wealth Management. “We think this trade has room to run as earnings are improving and we see higher margin growth at AI adopters versus the rest of the market.”
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With assistance from Michael Msika.
This article was generated from an automated news agency feed without modifications to text.
