London Reclaims Top Spot in European Stock Market
London has reclaimed its position as the leading European stock market, outperforming Paris due to a rally in energy giants and perceived value opportunities in certain sectors.
London has once again asserted its dominance over Paris as the leading European stock market. In a surprising twist, the French bourse outperformed its British counterpart last November, driven by the surge in luxury group shares such as LVMH, L'Oreal, Hermes, and Kering. The market capitalization of Paris soared past $3.4 trillion by Spring 2023, according to Bloomberg calculations.
Meanwhile, London struggled to keep up, failing to reach even $3.2 trillion due to the underperformance of its resource stocks amid low industrial commodity prices. However, recent months have seen a reversal of fortunes for French luxury group investors. Stocks like LVMH have experienced a downturn of approximately 20% since mid-July, largely due to concerns about declining demand from China as the world's second-largest economy grapples with sluggish growth.
In contrast, across the English Channel, energy giants have been experiencing a rally fueled by oil prices reaching 11-month highs. Shell, for instance, achieved a record high this week, recording an impressive 18% increase in value so far in 2023.
As a result, the Paris market's value has fallen to $2,887.5 billion, while London's stands slightly higher at $2,888.4 billion, as reported by Bloomberg. These market values were calculated by considering primary listings and excluding exchange traded funds and American depository receipts.
A recent survey conducted by Bank of America among European fund managers indicates that the London market may receive more support in the coming months. Investors are eyeing potential bargains in energy groups and miners. According to Bank of America, European tech, personal care, and consumer products are considered overvalued sectors, while real estate, energy, and basic resources are seen as undervalued opportunities.
In conclusion, London has regained its status as the top European stock market, surpassing Paris once again. With the recent rally in energy giants and the perceived value opportunities in certain sectors, London's market is expected to attract more support from investors in the near future.