Europe’s benchmark Stoxx 600 index closes at all-time high after data points to an economic recovery

European stocks powered higher Thursday, taking the benchmark index to a record close as investors assessed earnings and data showing light ahead for the regional economy.

The Stoxx 600 index ended the session 0.82% higher at 495.1, surpassing its previous record close of 494.35 on Jan. 5 2022, LSEG data showed.

Euro zone business activity showed some improvement in February, with manufacturing contracting but the services sector returning to growth, preliminary data showed.

In early U.S. trade, the S&P 500 traded at an all-time intraday high, boosted by a jump in Nvidia shares, while it was also a record day for Japan’s Nikkei.

“European equities have attracted increasing attention from investors in recent weeks as the U.S. has charged ever higher, leaving valuations of global companies listed in Europe looking ever more attractive,” Lindsay James, investment strategist at Quilter Investors, said in a note.

“While the European economy faces headwinds on several fronts — a still weak industrial base, recession in Germany, and the looming presence of Donald Trump and his talk of tariffs — many of the largest stocks in the index are globally facing, and benefit from far broader trends such as healthcare spending and drug innovation.”

Europe saw a bumper earnings day, with Nestle, Zurich Insurance, Iberdrola, Telefonica, Lloyds Banking Group, Rolls-Royce, WPP, Anglo American and Hargreaves Lansdown all reporting Thursday morning.

Rolls-Royce shares gained 7.8% in London after the British aerospace group more than doubled its annual profits in 2023 and forecast further momentum this year.