Key facts
- European stocks reached an all-time high on Tuesday.
- The STOXX 600 index was up 0.4% by 0856 GMT.
- Bayer reported an unexpected 1.9% increase in quarterly operating profit.
- The technology sector gained 1.7%, with BE Semiconductor up 5.6% after a 'buy' upgrade.
- Lufthansa warned of lower operating profit due to higher fuel costs.
- Zalando forecast lower revenue and growth for 2026.
European stocks reached an all-time high on Tuesday, buoyed by gains in technology shares and a wave of corporate earnings reports. The pan-European STOXX 600 index was up 0.4% by 0856 GMT, having earlier touched a record 656.85.
Investors are closely examining company updates for insights into the region's economic outlook. Bayer shares rose 3% after the German pharmaceuticals group reported an unexpected 1.9% increase in quarterly operating profit. The technology sector climbed 1.7%, with BE Semiconductor advancing 5.6% following a 'buy' upgrade from Berenberg. Other chip stocks, including Soitec, Aixtron, ASML, and Infineon, also saw gains.
The aerospace and defence sector rose 1.8%, while mining stocks jumped 2.6%, mirroring stronger metals prices. Analysts at UBS Global Wealth Management noted that company reports support a view of positive earnings trajectories in the region, potentially benefiting from increased focus on defense.
On the downside, Lufthansa shares fell 10.6% after the airline warned that operating profit could decline this year, having more than halved in the second quarter due to higher fuel costs. Zalando, the fashion retailer, was the biggest laggard on the STOXX 600, down 16.8%, after forecasting revenue and growth for 2026 to be in the lower half of its previously guided range. Retail stocks collectively fell 2.6%.
Energy stocks saw a modest rise of 1.1% as oil prices rebounded from a prior sell-off, though concerns about Middle Eastern supply vulnerability persisted amid elusive diplomatic progress in the U.S.-Iran conflict.