European shares climbed to another record on Thursday as stronger corporate earnings and lower energy costs drew investors towards the region’s industrial and healthcare companies.
The STOXX 600 advanced 0.3% to 665.38 points by 08:06 GMT, surpassing Wednesday’s record close of 663.05. Germany’s DAX gained 1% to an all-time high.
Siemens and Merck led gains after upgrading their outlooks, reinforcing confidence that European companies can sustain profit growth even as higher interest rates and geopolitical uncertainty threaten the wider market.
The advance also reflects a change in investor priorities: tangible earnings are gaining appeal as Wall Street faces renewed scrutiny of expensive artificial intelligence investments.
Siemens and Merck give Europe’s stock rally fresh momentum
Siemens rose 3.8% after lifting its medium-term comparable revenue growth target to 7%–11%, from 6%–9% previously.
The German engineering group reported a 22% increase in fourth-quarter industrial profit to €3.89 billion.
Orders jumped 58% to a record €34.77 billion, helped by railway contracts and demand for electrical infrastructure used in data centres.
Management expects revenue growth of 9%–11% in fiscal 2027, suggesting customers are continuing to invest despite uncertain financing conditions.
Merck KGaA gained 1.6% after raising its 2026 core earnings forecast for the third time this year.
The drug and semiconductor-materials supplier now expects adjusted earnings before interest, taxes, depreciation and amortisation of €6.2 billion–€6.4 billion, against an earlier range of €5.9 billion–€6.3 billion.
Its quarterly sales reached about €5.6 billion, supported by drug manufacturing supplies and advanced chip materials.
Europe’s earnings boom comes with an energy-sector caveat
LSEG estimates published last week showed STOXX 600 companies heading for 25% third-quarter earnings growth, the strongest in four years. A more recent Deutsche Bank assessment put growth at 28%.
Yet energy producers accounted for a disproportionate share of that strength, with sector profits expected to rise more than 150%. Excluding energy, LSEG’s earlier forecast showed growth of a more modest 9.5%.
That distinction matters as oil retreats from the elevated levels that boosted producers’ earlier results.
Stronger earnings may support the index, but the headline growth figure does not describe every European industry equally.
Barry Glavin, head of equity platform at Amundi, argued in the firm’s November investment outlook that Europe offered attractive valuations and opportunities among established businesses, while investors remained wary of expensive technology shares and persistent inflation.
Why lower oil prices and AI rotation are helping Europe
Brent crude was trading around $93 a barrel, far below its recent highs, easing fuel costs for European importers, transport companies and manufacturers.
Lower energy bills could also reduce inflation pressure, although shipping disruptions around the Strait of Hormuz remain a threat.
Citi strategists have upgraded European equities excluding the UK to overweight, according to The Wall Street Journal, citing the region’s lower sensitivity to technology valuations and its greater potential benefit from cheaper oil.
The STOXX 600 has gained about 4.7% this quarter, against a 0.4% decline in the S&P 500, underscoring the divergence.
Europe’s rally is not simply a retreat from AI.
Siemens’ data-centre orders show the region can benefit from the same investment cycle through equipment sales, without requiring investors to embrace the valuations of US technology giants.
AI disclosure: AI tools assisted with research and drafting of this piece. An Invezz editor reviewed the facts, sources and wording before publication. Any opinions or analysis are Invezz’s, not those of an automated system.
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