(Bloomberg) -- European stocks hit a record high, joining their Wall Street and Japanese peers, as optimism around economic growth and a potential easing of monetary policy extended last year’s rally.

The Stoxx Europe 600 Index climbed 0.8% to 495.10 points, topping its previous all-time closing peak hit in January 2022. Thursday’s gains were powered by tech stocks after Nvidia Corp. delivered another eye-popping sales forecast.

Just like in the US, concentration of returns has been a big theme in Europe recently, with just four stocks accounting for 65% of gains in the benchmark since the start of the year. Chip equipment maker ASML Holding NV, Danish drugmaker Novo Nordisk A/S, German software giant SAP SE, and French luxury goods manufacturer LVMH have all seen double-digit gains in 2024.

Beyond the individual industries, signs of a resilient global economy are buoying investor sentiment. At the same time, bets that global central banks will start cutting interest rates later this year are also turbocharging equities and already sent the US benchmark S&P 500 Index to a record.

Read More: US Big-Tech Mania Drives Developed-Market Stocks to Record

Charles-Henry Monchau, chief investment office at Banque Syz Group, says European stocks won’t be fazed even if growth in the eurozone disappoints.

High valuations for Europe’s top performers are “partly justified by superior earnings growth, a strong balance sheet and a sustainable competitive advantage,” he said.

Confidence in luxury stocks is also returning, with resilient sales at LVMH driving broader gains. 

Still, piecemeal stimulus from China has led to underperformance in the basic resource sector. Retail has also lagged, weighed down by Hennes & Mauritz AB. Some strategists including Max Kettner at HSBC Holdings Plc have warned that the bullish sentiment may have gone too far. 

Others counter that European equities are under-owned, arguing that the recent rally has been concentrated in US and technology-related stocks. 

“There is space for a broadening of the rally,” said Emmanuel Cau, a strategist at Barclays Plc.

--With assistance from Sagarika Jaisinghani and Michael Msika.

(Updates to add closing levels)

©2024 Bloomberg L.P.