By Johann M Cherian
Feb 16 (Reuters) – The STOXX 600 index edged higher on Monday, aided by gains in financial stocks ahead of data on industrial production, while investors geared up for fresh earnings releases later this week that could offer clues into the health of corporate Europe.
The pan-European index edged up 0.2% to 618.91 points by 0844 GMT, with the banks-heavy Spain’s benchmark leading gains among regional markets.
European shares hit a volatile patch in late January and through early February on worries that newer artificial intelligence tools could squeeze profits of traditional businesses.
However, a better-than-feared earnings season in the face of steep U.S. tariffs helped the STOXX index touch a record high last week and log its third-straight week of gains.
Banks and insurance stocks had been mired in AI-disruption worries last week, with the lending index logging its biggest one-week drop since late-March 2025. On Monday, lenders bounced back with a 1.7% rise, while insurance stocks added 1%.
“The real challenge is that even by the end of this year we still won’t have enough evidence to identify the structural winners and losers with confidence. That leaves plenty of room for investors’ imaginations—both optimistic and pessimistic—to run wild. As such big sentiment swings will continue to be the order of the day,” a group of analysts led by Deutsche Bank’s Jim Reid said in a note.
No major earnings releases are expected on Monday, but those from Orange, Zealand Pharma, Airbus and BE Semiconductor are due later this week.
So far, 60% of European companies have beaten earnings expectations, compared with 54% seen in a typical quarter, according to data compiled by LSEG. Further, earnings are expected to have fallen 1.1%, versus about a 4% drop earlier in the month.
On the data front, a report later in the day is expected to show euro zone industrial production increased 1.3% year-on-year in December, compared with a 2.5% rise a month earlier, at a time when investors are anticipating that fiscal stimulus is reviving the sector.
Among others, Orsted gained 2.7% after brokerage Kepler Cheuvreux raised the Danish offshore wind developer to “buy” from “hold”.
Norsk Hydro <NHY.OL> lost 3.4% after the brokerage downgraded the aluminium producer to “reduce” from “hold”. The broader basic resources index slipped 1.3%.
Baby formula makers such as Nestle and Danone were marginally lower after the Paris public prosecutor opened five investigations over contamination with toxin cereulide.
(Reporting by Johann M Cherian in Bengaluru; Editing by Mrigank Dhaniwala)
