FRANKFURT (dpa-AFX) - After a weak first half of December, the recovery in the European utility sector at the beginning of the new trading year 2025 is taking shape. From its losses at the beginning of December until shortly before Christmas, the sector has now recovered a good 62 percent. On Friday, it gained 0.3 percent at the front of the Stoxx 600 sector overview. Among the best performers were RWE, which also led the German leading index Dax with a gain of 2 percent.

Market participants continue to emphasize the growing global demand for energy through the application of artificial intelligence (AI), from which energy companies generally benefit – an issue that is likely to become even more important in 2025.

Mark Casey, equity portfolio manager at Capital Group, wrote in an outlook for 2025 that the major US technology companies such as Alphabet, Amazon, Meta and Microsoft would spend about half of their investment budgeton the purchase of real estate, the construction of as many data centers as possible in the vicinity of a reliable power supply, and the conclusion of long-term contracts with energy suppliers.

European utilities, in turn, should also benefit from the prospect of interest rates continuing to fall in the eurozone. This will reduce the utilities' usually high financing costs./ajx/mis