Spanish stocks and related exchange traded fund is outpacing the broader European equities market as traders capitalize on cheap valuations and the peripheral state rebounds from the Eurozone debt crisis.
The iShares MSCI Spain ETF (NYSEArca: EWP) rose 1.7% Monday. EWP has gained 28.1% over the past year. [Ten Best Europe Country ETFs]
In comparison, the Vanguard FTSE Europe ETF (NYSEArca: VGK), which includes a diversified portfolio of European stocks, was 0.3% higher Monday. VGK increased 21.7% over the past year.
Spanish stocks are gaining momentum after economic data revealed the country’s service sector expanded at its fastest in six and half years, reports Francesco Canepa for Reuters.
“We think this is really the start of the improvement in data and we see (it) as a sustainable story,” Gareth Evans, a strategist at Deutsche Bank, said in the article.
Peripheral Eurozone states that suffered during the brunt of the debt-induced financial crisis are now offering attractive valuations, compared to core countries, like Germany and France.