Europe close: Pharma and tech stocks help Stoxx 600 to new record

European equity markets put in a decent performance on Thursday with a small rise in London outweighed by gains of more than 1% in Frankfurt, Paris and Milan, pushing the continent's benchmark index to a new closing peak.

Pharmaceutical stocks were the best performers of the day, with Indivior and Gerresheimer among the top risers on the Stoxx 600, with the sector helped higher by well-received results from American giant Moderna, which posted a surprise quarterly profit.

Impressive quarterly numbers and guidance from US chip mammoth Nvidia on Wednesday were also helping sentiment across global markets, helping to drive Wall Street's three main equity indices close to or above record highs.

The pan-European Stoxx 600 finished the session up 0.8% at a new closing high of 495.1p, ahead of the previous 494.4p closing peak reached in January 2022.

The Dax gained 1.5%, the Cac 40 rose 1.3% while the FTSE MIB increased 1.1%. London's FTSE 100, however, closed just 0.3% higher with retailers and mining companies providing a drag.

“It’s on days like today when the dearth of big tech stocks on London markets really hits home,” says Danni Hewson, head of financial analysis at AJ Bell. “Whilst records have been breaking all over the place after Nvidia’s barnstorming fourth quarter update, things have looked distinctly tepid on both the FTSE 100 and 250."

Data provides a lift

In macro news on Thursday, the flash eurozone composite PMI from HCOB showed that the rate of decline in private-sector activity eased to its lowest level in eight months in February, rising to 48.9 from 47.9 in January. The eurozone services PMI increased to a seven-month high of 50 from 48.4 previously, offsetting a fall in the manufacturing PMI to 46.1 from 46.6.

The S&P Global/CIPS UK composite PMI rose to a nine-month high of 53.3 in February, surprising analysts who had pencilled in no change from January's level of 52.9.

Meanwhile, secondary estimates of eurozone inflation for January confirmed preliminary figures, showing that inflation edged lower last month to 2.8%, down from December’s 2.9%, in line with forecasts.

Indivior and Gerresheimer lead pharma stocks higher

London's Indivior surged after posting a 27% jump in full-year profits and announcing plans to ditch its UK listing in yet another blow to the British capital's reputation as a financial cent.

German pharma supplier Gerresheimer was also up 13% after impressing the market with strong guidance for 2025 on the back of booming demand of its obesity drug.

UK banking group Lloyds rose strongly after it reported a 57% jump in full-year profits and announced another £2bn share buyback, along with a 15% increase in its full-year dividend.

Shares in Nestlé dropped after the food and drink giant said that organic growth would slow this year. The Switzerland-headquartered firm said it expects organic sales to increase by "around 4%" in 2024, missing the current consensus estimate of 4.7%, and down from 7.2% organic growth in 2023.

Rolls-Royce jumped to the top of the Britain's FTSE 100 as it reported a more than doubling of its full-year profits, underpinned by its civil aerospace segment.

Beazley rallied as it upgraded its guidance for the undiscounted combined ratio from low-80s to mid-70s for 2023 thanks to better-than-expected claims experience during the year. It also said that as well as an ordinary dividend, shareholders will receive an additional capital return for the year of around $300m.