European shares set for weekly gains as earnings outlook improves; geopolitical tensions in focus

By Johann M Cherian

Feb 20 (Reuters) – European shares edged higher on Friday and were on track for weekly gains, buoyed by a broadly improving corporate earnings outlook and easing AI-disruption worries, while simmering geopolitical tensions kept a ​lid on enthusiasm.

The pan-European STOXX 600 index rose 0.48% to 628.35 ‌points by 0942 GMT, trading just shy of an all-time high, with most regional benchmarks also in the black.

Luxury brand Moncler jumped 11.3% after reporting a 7% rise in revenue in the fourth quarter, helped by solid growth in Asia and the Americas.

The personal and household goods sector added 1.4%, ‌while ​gains spilled over to the broader luxury sector that ⁠rose 2%.

The STOXX index was ⁠also set to mark its biggest weekly jump since early January as investors were relieved by an overall improving corporate earnings outlook, while concerns that new artificial intelligence models could imminently disrupt traditional businesses temporarily took a back seat.

Anis Lahlou, chief ​investment officer of European equities at Aperture Investors, said the big wake-up call was discovering software, which was thought to be the best return on investment, was ⁠no longer all of a sudden.

“An important question of ⁠stock picking now is: what is the risk of disruption ​from AI on this business model? –  this is not the usual question you ask when ​you were looking at stocks before. But now this is the first ‌question you want to ask when you open a meeting with a company.”

Banks, which had witnessed sharp losses at the peak of the AI-disruption selloff, were among the top sectoral performers this week. However, those concerns are likely to resurface as investors scrutinize ⁠ways the technology could affect businesses.

Meanwhile, global markets were monitoring developments in the oil-rich Middle East as President Donald Trump warned Iran it must make a deal over its ⁠nuclear program or “really bad things” ‌will happen. Defence stocks were marginally higher and has jumped ⁠nearly 4% this week.

The focus later in the day will ​shift to ‌initial business activity surveys out of eurozone economies, along with ​a key ⁠inflation report out of the U.S.

Among others, life sciences firm Siegfried slid 6.7% after its annual revenue slightly missed analyst expectations.

Italian insurer Unipol gained 6% after reporting a 36.8% rise in its full-year profit. Companies that reported results on Friday also included French food group Danone and UK’s Anglo American .

(Reporting by Johann M Cherian in Bengaluru; Editing by Nivedita ​Bhattacharjee and Vijay Kishore)