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London - Winners and losers among European stocks in the immediate aftermath of Donald Trump’s election win swapped places on Friday, sending equities lower.
Industry groups that rallied in the immediate aftermath of Trump’s victory have started losing ground, while those that were punished are recovering, on bets the moves went too far.
Construction firms and health-care shares were among the worst decliners in the Stoxx Europe 600 Index, after rallying on Wednesday amid speculation of higher infrastructure spending and less regulatory oversight, respectively. Bond-proxy sectors such as utilities and real estate firms rebounded from two days of losses.
The Stoxx 600 fell 0.4% at 12:37, failing to hold gains of as much as 0.7% at the open. That trimmed the benchmark’s biggest weekly advance since July. European equities are losing momentum after a three-day advance that broke their longest , spell without gains since 1994.
After the surprise of Trump’s win spurred an initial selloff, European stocks jumped on Wednesday amid gains in industries seen benefiting from it.
Heavyweights such as banks and health-care shares boosted the Stoxx 600 on speculation US regulatory oversight will ease, while miners and construction firms rose on optimism over increased infrastructure spending. The Republican victory also spurred bets for higher inflation, dragging down bond-proxy sectors such as utilities and real estate. The Stoxx 600 is up 2.5% this week.
Among shares active on corporate news on Friday, Allianz rose 2% after it reported an increase in quarterly profit, boosted by its life and health insurance unit. Unione di Banche Italiane added 3.7% as Italy’s fifth-largest bank posted net income that beat estimates. Gamesa. Tecnologica advanced 5.2% after raising its 2016 earnings forecast.
PostNL slid 5.6% after it rejected a €2.5bn approach from Bpost, saying the proposal’s value is too low and potentially puts the Dutch company under the Belgian government control.
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