Europe’s Stoxx 600 closes at record high as earnings, tech gains lift sentiment
The technology sector gained 2.8% for the day
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EUROPE’S Stoxx 600 closed at a record high on Tuesday (Aug 4), lifted by gains in technology stocks and a slate of corporate earnings updates that helped boost sentiment, while falling oil prices provided further support.
The pan-European Stoxx 600 index was up 0.7 per cent to 656.86 points at close, surpassing the previous record set in early July.
“European main indexes (have been) flirting with record levels since the end of last month. But already in the past few months, we have seen consecutive months of gains. One of the main reasons is definitely the rising corporate profits,” said Ruben Dalfovo, Investment Strategist at Saxo Bank.
With the European earnings season gathering pace, investors sifted through company updates for clues on the region’s business outlook. Shares in Bayer rose 2.4 per cent after the German pharmaceuticals group reported an unexpected 1.9 per cent increase in quarterly operating profit.
Europe’s largest bank HSBC shares edged lower 0.8 per cent, after hitting a fresh all-time high earlier on Tuesday, despite reporting a better-than-expected first-half profit and raised its net interest income target.
Dalfovo said HSBC delivered strong earnings growth, but that the results failed to excite investors as expectations were already high after the stock’s strong run over the past few years.
The technology sector gained 2.8 per cent, with BE Semiconductor advancing 8.1 per cent after Berenberg upgraded the stock to “buy”, saying recent market weakness has created an attractive entry point for investors.
Other chip stocks also advanced. Soitec led gains with a 9.9 per cent rise while Aixtron, ASML and Infineon were up between 2.6 per cent and 3.7 per cent. Global chip stocks have recently been volatile as investors assessed whether AI-driven demand could sustain lofty valuations.
Mining stocks jumped 3.6 per cent, making them the best-performing sector, tracking higher metals prices. On the flip side, Lufthansa shed 8.2 per cent after the German airline warned that operating profit could fall this year after the figure more than halved in the second quarter due to higher fuel costs tied to the Iran war.
Energy stocks fell 1.7 per cent for a second straight session as oil prices hit a three-week low after Qatar said mediators were making progress in efforts to end the war.
Markets have repeatedly swung between optimism and pessimism since the conflict began in late February, as both sides have struggled to reach a mutually acceptable resolution.
Zalando was at the bottom of the Stoxx 600, down 13.4 per cent after the fashion retailer forecast 2026 revenue and growth to land in the lower half of its previously guided range and narrowed its adjusted operating profit outlook. Retail stocks fell 0.7 per cent. REUTERS
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