By Avinash P and Johann M Cherian
(Reuters) - European shares hit a new record on Friday and were set to
log an eighth straight month of gains as better-than-expected corporate
updates supported risk appetite despite lingering tariff and
AI-disruption concerns.
The pan-European STOXX 600 (.STOXX) was up 0.3% at 635.04 points by 0954 GMT. The benchmark touched three
new record peaks this week and is set for a 0.7% weekly gain if the
current trend holds.
Much
of February was dominated by concerns that new AI tools could disrupt
traditional business and eat into their profits, along with trade
ambiguities from the U.S. after President Donald Trump imposed a new
global tariff.
However,
the benchmark index is on track for its longest monthly winning run
since mid-2012 to 2013 as investors took comfort from an overall
improving corporate outlook in Europe, with updates from HSBC (HSBA.L), Nestle (NESN.S) and Capgemini (CAPP.PA) lifting sentiment.
Earnings
are expected to drop 0.6% in the previous quarter on a year-on-year
basis, compared to a 4% fall analysts were expecting earlier in the
month, according to data compiled by LSEG.
"There
is an appetite still for equities and I think investors are looking at
those previously undervalued sectors within the broad markets because
it's so easy now to trade an ETF on anything you like around the world,"
said David Morrison, senior market analyst at Trade Nation.
Among big movers on Friday, Swiss Re (SRENH.S) shares
added 3.6% after the reinsurer posted a better-than-expected rise in
net profit of 47% and announced an additional $1 billion share buyback.
Online takeaway food company Delivery Hero (DHER.DE) fell 6.3% after reporting
annual gross merchandise value slightly below market expectations,
reflecting competitive pressure and a challenging economic environment.
British Airways owner IAG (ICAG.L) beat annual profit expectations. However, shares fell 4.7% along with the broader travel and leisure sector (.SXTP) as crude prices gained over 1%.
Banking stocks (.SX7P), (.SX7E) were flat, with Barclays (BARC.L) falling
as much as 3.8% after a report said the lender faces potential losses
related to the collapse of mortgage-finance firm Market Financial
Solutions.
On the macro front, French consumer prices rose more than expected in February, after they slowed to their lowest in more than five years in January.
Melrose (MRON.L) dropped
13.3% after the GKN Aerospace owner flagged softer-than-expected
revenue for 2026 as sector-wide supply chain constraints persist.
BASF (BASFn.DE) lost 1.9% after flagging that 2026 adjusted operating income could slip or rise only slightly amid difficult markets, missing market expectations, which prompted the chemicals giant to step up cost-saving efforts.
Reporting by Avinash P and Johann M Cherian in Bengaluru; Editing by Sonia Cheema and Vijay Kishore
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