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Employees walk past FTSE AIM share price information displayed on an illuminated rotating cube in the atrium of the London Stock Exchange Group Plc's offices in London, U.K., on Friday, July 6, 2018. U.K. Prime Minister Theresa May is about to unveil in more detail than ever the kind of divorce from the EU she thinks the country, Parliament and Brussels will accept, with a policy document called a "white paper." Photographer: Simon Dawson/Bloomberg

(bloomberg)

(Bloomberg) -- European equities rebounded from slumping to 2016 lows yesterday as all sectors advanced, led by tech and mining shares.

The Stoxx Europe 600 Index added 0.9 percent, trimming the weekly drop to 3.6 percent, which would still make it the worst week since March. SAP jumped 2.4 percent, after Deutsche Bank recommended buying the stock after the sell-off, and Glencore added 2.2 percent.

European stocks slumped to the lowest level since December 2016 on Thursday as rising interest rates led investors to rotate out of their equity holdings and as concerns about the U.S.-China trade spat remained in focus. Although U.S. economic growth remains robust, traders are wondering when the impact from the tax reform will start dissipating, which would weigh on corporate earnings and stocks.

“European equities are under-owned and look oversold,” said Emmanuel Cau, head of European strategy at Barclays Bank Plc. “At the same time, Europe could be a relative beneficiary if the rotation into value were to continue as the U.S. is biased towards growth. However, Europe is unlikely to outperform if U.S. equities keep falling.”

To contact the reporter on this story: Ksenia Galouchko in London at kgalouchko1@bloomberg.net

To contact the editor responsible for this story: Blaise Robinson at brobinson58@bloomberg.net

©2018 Bloomberg L.P.

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