European shares ended the week on a high note, marking their best performance since late June. The pan-European STOXX 600 index climbed 0.7% to 644.74 points, capping a weekly gain of over 2%. This resilience came despite a global selloff in technology stocks, driven by concerns over debt reliance for AI development and competition from China.
Strong earnings reports from companies like Aixtron and Vestas Wind Systems helped offset the tech downturn. Aixtron surged 6% after exceeding order intake estimates, while Vestas soared 12.3% following better-than-expected profits and an upgraded margin forecast. However, ASML shares reversed earlier gains, ending 1.8% lower after raising its 2026 profit and revenue targets.
Analysts highlighted the importance of diversification, with Daniela Hathorn of Capital.com noting that strong earnings can boost investor sentiment and potentially push markets back to recent highs. The STOXX 600 companies are expected to see a 20.7% earnings increase in Q3, slightly down from last week's forecast.
The euro zone’s final HICP inflation reading for September remained at 3.8% year-on-year, above the European Central Bank’s 2% target. The ECB has already raised rates to 2.50% and is expected to implement another quarter-point hike in December to curb inflationary pressures.