European Stocks Edge Higher, Poised for Strong Weekly Gains on Earnings Optimism

European equities traded higher on Friday and were on track to post their strongest weekly gains since early January, supported by an improving corporate earnings outlook and easing concerns over near-term disruption from artificial intelligence, although persistent geopolitical tensions tempered overall enthusiasm.

By 09:42 GMT, the pan-European STOXX 600 index rose 0.48% to 628.35 points, trading just below a record high. Most major regional indices also advanced, reflecting broad-based strength across sectors.

The luxury segment led gains after Moncler (MI: MONC) surged 11.3%, following the Italian brand’s report of a 7% increase in fourth-quarter revenue. The results were driven by solid demand in Asia and the Americas, reigniting optimism across the high-end consumer space. The personal and household goods sector climbed 1.4%, while the broader luxury sector gained 2%.

The STOXX 600 was set to record its biggest weekly advance in more than a month, as investors took comfort from generally resilient earnings and guidance. Recent fears that newly released artificial intelligence models could rapidly disrupt traditional business models eased somewhat, allowing risk appetite to recover, at least temporarily.

Bank stocks, which had suffered sharp declines during the peak of the AI-driven selloff earlier in the month, were among the strongest sectoral performers this week. Still, analysts cautioned that concerns over AI’s longer-term impact on profitability and business models are likely to resurface as investors dig deeper into company exposure to the technology.

Geopolitical risks remained in focus. Markets continued to monitor developments in the Middle East after U.S. President Donald Trump warned Iran that it must reach a deal over its nuclear program or face severe consequences. Defense stocks edged higher and were up nearly 4% on the week, reflecting heightened security concerns.

Attention later in the session was set to turn to preliminary business activity surveys from euro zone economies, as well as a key U.S. inflation report that could influence expectations for global monetary policy.

Among individual movers, Swiss life sciences firm Siegfried fell 6.7% after reporting annual revenue that narrowly missed analyst expectations. In contrast, Italian insurer Unipol (MI: UNPI) jumped 6% after posting a 36.8% increase in full-year profit. Other notable earnings released on Friday included results from French food group Danone (PA: DANO) and mining group Anglo American.

Overall, European markets ended the week on a firm footing, balancing improving corporate fundamentals against lingering geopolitical and technological uncertainties.