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

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