Europe's STOXX 600 finished at a record level on Tuesday, propelled by strength in technology names and a batch of corporate updates that underpinned market sentiment, while lower oil prices offered additional tailwinds. The pan-European benchmark closed up 0.7% at 656.86 points, moving past the previous peak recorded in early July.
Ruben Dalfovo, Investment Strategist at Saxo Bank, noted that European main indexes have been "flirting with record levels since the end of last month," and pointed to consecutive months of gains in recent months. He identified rising corporate profits as a principal driver behind the advance.
With earnings season gathering momentum across the region, investors evaluated company reports and guidance for signals about the outlook for business activity. German pharmaceuticals group Bayer was among the winners, its shares climbing 2.4% after the company posted an unexpected 1.9% increase in quarterly operating profit.
HSBC, Europe’s largest bank by some measures, slipped 0.8% after earlier in the session hitting a fresh all-time high. The bank reported a better-than-expected first-half profit and raised its net interest income target, but Dalfovo said the strong results did not generate additional enthusiasm given the very high expectations following the stock’s strong performance over recent years.
The technology sector led sectoral gains, rising 2.8% on the day. BE Semiconductor jumped 8.1% after Berenberg upgraded the stock to buy, citing what it called an attractive entry point following recent market weakness. Other chip-related stocks also moved higher: Soitec surged 9.9%, while Aixtron, ASML and Infineon gained between 2.6% and 3.7%.
Mining stocks outperformed the broader market, advancing 3.6% and becoming the best-performing sector as metals prices trended higher. That strength contrasted with the more pronounced weakness seen in other pockets of the market.
One of the day’s notable decliners was Lufthansa, which tumbled 8.2% after cautioning that operating profit could fall this year. The airline said its operating profit more than halved in the second quarter and attributed pressure to higher fuel costs linked to the Iran war.
Energy stocks fell for a second consecutive session, down 1.7%, as oil prices slid to a three-week low following remarks that mediators were making progress in efforts to end the conflict. Markets have swung between optimism and pessimism since the conflict began in late February, reflecting intermittent progress and setbacks in reaching a resolution acceptable to both sides.
Zalando finished at the bottom of the STOXX 600, plunging 13.4% after the fashion retailer said it expects 2026 revenue and growth to land in the lower half of its previously guided range and narrowed its adjusted operating profit outlook. The retail sector overall fell 0.7% on the day.
Across the market, moves were heterogeneous: some companies and sectors benefited from positive earnings momentum and analyst upgrades, while others were hurt by rising input costs or softer guidance. Investors continued to weigh corporate updates alongside geopolitical developments and commodity price moves as they recalibrated positions within European equity markets.