European healthcare stocks rebound as investors shift to defensive stocks

UBS analysts wrote that the Middle East conflict could lead to downgrades in European corporate earnings, which means investors should focus on sectors where “pricing power and cost pass-through ability remain evident.” Due to stable demand for healthcare services, the profitability of the healthcare industry is generally insensitive to economic cycles. Among European fund managers surveyed in April, a net 25% believed that healthcare stocks would outperform other sectors. In afternoon trading, a basket of European healthcare stocks rose 0.8%, while the Europe-wide STOXX 600 Index, which covers all sectors, fell 0.1%.