European equity markets climbed to unprecedented heights on Thursday, spearheaded by a rally in French benchmarks as a string of upbeat corporate earnings reports bolstered confidence.
The pan-European STOXX 600 edged up 0.7% to reach 625.86 points, while the CAC 40 outpaced its peers with a gain of more than 1.4%.
Specific corporate success stories drove much of the morning’s momentum. Shares of Legrand rose 3.3% following the company’s announcement that the booming data center market is fueling its expansion, allowing for an upward revision of its medium-term profitability goals. Similarly, luxury powerhouse Hermes saw its stock climb 2.3% after reporting consistent revenue growth, underpinned by robust consumer demand in both Japan and the United States.
Broader market sentiment was further supported by a sense of international relief. Investors reacted positively to recent US labor data, which indicated a resilient job market, effectively overshadowing recent anxieties regarding AI-driven market volatility. This shift in focus allowed equities to regain their footing after several sessions of uncertainty.
Merger and acquisition activity provided an additional jolt to the financial sector. Shares of British money manager Schroders skyrocketed 30% after US-based Nuveen announced an agreement to acquire the firm for £9.9 billion ($13.5 billion). The deal, which creates a combined entity managing nearly $2.5 trillion in assets, pushed the broader financial services sector up by 1.4%, making it the day’s top-performing industry group.
On the FX front, the Japanese yen surged on Thursday, positioning itself for its most significant weekly gain in over a year. This resurgence has placed notable pressure on the US dollar, signaling a potential sentiment shift in global currency markets.
The yen climbed approximately 2.8% against the greenback and over 2% against the euro this week. While the dollar index edged slightly lower.
In other regions, the Australian dollar reached a three-year peak of $0.7146. This rally follows a series of interest rate hikes by the central bank, which has signaled that more tightening may be necessary to curb persistent inflation.
Meanwhile, China’s yuan continued its steady appreciation, bolstered by seasonal demand for cash ahead of the Lunar New Year. The currency crossed the significant 6.90 per dollar threshold on Thursday, marking its strongest level in 33 months.
The euro and British pound both saw modest gains of about 0.11% against the dollar. For the pound, this resilience came despite new economic data revealing that the UK economy experienced almost no growth during the final quarter of 2025.
Currency Power Balance
