European stocks hit record highs on strong earnings, lower oil prices

European stocks climbed to a record high on Thursday, supported by robust corporate earnings, easing geopolitical tensions and a shift in investor interest away from artificial intelligence-linked stocks in the United States and Asia.

The pan-European STOXX 600 rose 0.3% to 665.38 points by 0806 GMT, extending gains after closing at a record high in the previous session. Germany's DAX outperformed regional peers, rising 1% to a fresh peak.

European equities have remained resilient in recent months despite energy-driven inflationary pressures and expectations of higher interest rates, with strong corporate earnings providing support.


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STOXX 600 companies are expected to report quarterly profit growth of around 25%, the strongest pace in four years, according to LSEG-compiled data. Energy companies have been a major contributor to the earnings growth.

Among individual stocks, Siemens gained 3.8% after the industrial technology group raised its growth outlook. Drugmaker Merck advanced 1.6% after increasing its 2026 profit guidance for the third time this year.

Investor sentiment also improved as oil prices slipped below $100 a barrel after the United States indicated that an immediate attack on Iran was unlikely. Lower oil prices are particularly beneficial for Europe, which relies heavily on energy imports.

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European markets have also benefited from their relatively limited exposure to AI-linked stocks, which have faced increased scrutiny amid concerns over valuations and the sustainability of the artificial intelligence investment boom.

The STOXX 600 has gained 4.7% so far this quarter, while the US benchmark S&P 500 has declined 0.4%, highlighting the relative outperformance of European equities.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times.)