Global equities rise near record highs, but European banks lag on concerns over stagflation-driven ECB rate hikes.
Global equities climbed in a volatile session, with several markets approaching all-time highs, driven by macroeconomic data and geopolitical headlines. Cyclical sectors led gains, though regional disparities emerged, particularly in Europe where defensives outperformed despite higher interest rates.
European banks underperformed, signaling investor unease over stagflation risks highlighted by recent flash PMIs. The data suggests the European Central Bank may raise rates for reasons equity investors view as detrimental. Meanwhile, Asian markets rose, led by Japan rather than the typical tech-heavy markets like South Korea and Taiwan.
The shift reflects broader macroeconomic optimism and reopening hopes, rather than a traditional tech-driven rotation. Stagflation concerns remain a key overhang for financials and rate-sensitive sectors.