For years, European equities lived in the shadow of America’s high-flying tech giants. This year, the story has shifted.

A value rotation

Investors hunting for reasonably priced shares have rediscovered Europe’s banks, defence firms, luxury houses and industrials. Indices in Frankfurt, Paris and Milan have posted strong gains.

European banks in particular have benefited from higher interest rates, fat profit margins and generous dividends — a far cry from the crisis years of the 2010s.

Risks remain

Slowing growth, political uncertainty and exposure to global trade tensions could yet derail the rally. But for now, the continent’s markets are enjoying a rare moment in the sun.