By Avinash P and Johann M Cherian
Feb 26 (Reuters) – Europe’s benchmark index hit a record high on Thursday, driven by upbeat corporate earnings from the likes of Schneider and Indra, while investors mulled the outlook for artificial intelligence following chip-leader Nvidia’s strong forecasts.
The pan-European STOXX 600 index was up 0.2% at 634.60 points by 0950 GMT.
The broader defense sector gained 1.2% and was among the top sectoral performers, led by Indra with an 18% gain.
The Spanish company reported better-than-expected 2025 results on an order backlog that more than doubled and robust growth across all businesses.
The focus was also on technology stocks after Nvidia forecast first-quarter revenue above market estimates, with its shares up 1% in U.S. premarket trading, reflecting a relatively muted response by investors.
Gains in European tech shares were small at a time when the sector globally is under scrutiny on concerns that newer AI models can disrupt traditional businesses, while AI leaders continue to spend billions on developing the technology.
“There’re a lot of questions around on the software side and about the level of disruption that we’ll see. But for now, at least, on the hardware side, the outlook should be quite constructive,” said Richard Flax, chief investment officer at Moneyfarm.
AI hardware maker Schneider Electric reported stronger-than-expected core earnings, driven by robust data centre demand, sending its shares up 3.7%.
London Stock Exchange Group jumped 6.1% after announcing a share buyback plan amid pressure from activist investor Elliott Management and concerns about AI impacting its business model.
On the macro front, the added uncertainty is the disruption in labour force. Against this backdrop, European Central Bank President Christine Lagarde said AI integration is not yet causing a wave of layoffs due to greater automation of labour.
French utility Engie jumped 7.2% after the company announced it would buy UK Power Networks from Hong Kong-listed CK Infrastructure Holdings for 10.5 billion pounds ($14.21 billion).
The acquisition is expected to be transformational for Engie, which was the only major utility without an electricity network in Europe.
The day also saw additional earnings reports, with Belgian chemicals group Syensqo tanking 21% and triggering a trading halt after fourth-quarter core earnings missed expectations.
German sportswear maker Puma jumped 6.3% as annual losses were narrower than expected. Hikma Pharmaceuticals tanked 14% after the drugmaker forecast slower annual revenue growth.
(Reporting by Avinash P and Johann M Cherian in Bengaluru; Editing by Mrigank Dhaniwala and Vijay Kishore)
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