The European stock market was outperforming the American markets in the first quarter of 2025. Then came US President Donald Trump’s “Liberation Day” and markets across Europe plunged. Should investors still look to Europe in the mid- and long-term?
Yap Fook Hien, senior investment strategist, wealth solutions for Standard Chartered Bank breaks it down.
Here is an excerpt from the conversation:
Andrea Heng, host:
What other sectors can investors look at within the EU (European Union)?
Yap Fook Hien, Standard Chartered Bank:
So within Europe our view for the overweight sectors are financials and industrials … We do like technology as well. And the other one is communication services.
For technology, a large part of European technology actually is semiconductors. More than half of it. And they do have leadership there in some areas. Now the tariffs do cause uncertainty.
We do see the big companies there flagging that but the AI development and the tailwind around that, we believe, we are still in the very early days, and that’s actually creating a good structural demand for semiconductor equipment companies.
With a majority or more than half of Europe being exposed to that, we think that is attractive. Although it is choppy, of course, because of the tariffs and a lot of export restrictions from the US. But the structural trend is something that we like.
Andrea:
I need to throw a curveball here because we cannot discount the fact that Mr Trump is going to throw another big curveball, right? What happens if President Trump pulls another big move? What would your advice to investors be then?
Fook Hien:
Yeah, it’s very hard to predict what he will do.
What we keep telling our investors is to be diversified. Having that diversification in your portfolio (is beneficial). We’re talking about stocks, bonds and also having a bit of gold as well within the portfolio.
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