European growth stocks recorded double-digit gains despite the ongoing impact of the Russian invasion of Ukraine, according to data from global data provider Investment Metrics.
Growth-oriented sectors – such as information technology and consumer discretionary – fared particularly well as the MSCI Europe index returned 4.87%.
However, European value-dominated sectors – such as energy, financials and communications – were largely flat over the month.
Analysts at the firm noted: “Europe has been more negatively impacted by the energy crisis caused by Russia’s invasion of Ukraine and the subsequent embargo of Russian energy resources.
“Energy price increases this year have been a major contributor to eurozone inflation. The euro and US dollar also reached parity in July for the first time in 20 years.”
There was strong performance for US growth stocks, outperforming value stocks for the second month straight, as the S&P 500 rose by 9.2%.
The firm noted: “Despite the recent market rally, the risks of further market turmoil remain front and centre.
“Persistent supply shocks, the war in Ukraine and the potential for further geopolitical disruption in Taiwan have increased inflation expectations. This, combined with tightening monetary policy, has stoked fears that will likely feed uncertainty and equity volatility.”
Emerging Markets did not participate in the bounce back seen in developed markets, Investment Metrics noted, with the MSCI Emerging Markets down 0.69%.
“This was driven by weak results in China as its manufacturing sector contracted during the month,” it said. “US dollar strength remained a headwind.”
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