European utilities at 16-year high as US tariffs spark defensive move

Corporacion Acciona Energias Renovables SA

03/04/2025 10:01

** Shares in European utilities, which are less exposed to economic downturns, rise to more than 16-year high on Thursday after U.S. President Donald Trump unveiled sweeping tariffs

** The pan-European STOXX 600 utilities index .SX6P is up 1.85% at 0842 GMT, its highest since September 2008

** Morgan Stanley expects European utilities to continue outperforming the market in light the tariffs

** "Whilst this may be a 'pyrrhic victory' in relative (rather than absolute) performance, we nevertheless expect continued pivot to defensives to benefit Utilities," MS says

** Portugal's EDPR EDPR.LS and EDP EDP.LS lead gains, up around 4% and 6%, respectively

** British water companies Pennon Group PNN.L, Severn Trent SVT.L are up around 3% each

** MS says it expects UK stocks to outperform EU given varying degrees of tariff, and where UK has lagged YTD

** The broker sees most operational risk in renewable developers with US exposure, including Orsted ORSTED.CO, RWE RWEG.DE, ERG ERG.MI, Acciona Energia ANE.MC

 (Reporting by Amir Orusov)

 ((Amir.orusov@thomsonreuters.com))