European Stocks Kick Off February in the Red

European stocks closed firmly higher on Friday, bouncing from the sharp declines in the previous session to halt the pressure over AI-related disruptions and exaggerated valuations among software stocks. The Eurozone's STOXX 50 gained 1.2% to 5,998 and the pan-European STOXX 600 added 0.9% to 617. ASML surged nearly 4% to pare the aggressive losses from the week, tracking the rebound for tech shares. In the meantime, Vinci soared nearly 10% after beating their earnings forecasts in the fourth quarter. Elsewhere, Rheinmetall jumped 2% as analysts noticed a changeup in their interpretation of their guidance accounting from the previous session, while Siemens and Siemens Energy also rebounded from plunges this week. On the other hand, Stellantis plunged nearly 20% after warning it expects to take a €22 billion hit from restructuring its business to accelerate the rollout of electric and hybrid vehicles.

European equities rebounded on Friday, with the STOXX 50 climbing 0.7% and the STOXX 600 rising 0.4%, after a lacklustre start to the session. The recovery came as concerns over AI-related disruption and lofty valuations appeared to ease, while investors continued to assess a fresh round of corporate updates. Gains were led by industrial and technology names, with ASML Holding up 1.3%, Siemens adding 1.8%, and Rheinmetall surging 4.3%. Novo Nordisk jumped more than 5% after the US FDA threatened action against illegal copycat drugs. Vinci soared over 8% after reporting higher revenues while Orsted advanced 1.7% following a 9.8% annual increase in revenues. On the downside, Stellantis plunged 27% after warning it expects to take a €22 billion hit from restructuring its business to accelerate the rollout of electric and hybrid vehicles. Societe Generale fell 3.8% after its results disappointed. For the week so far, the STOXX 50 is down 0.3%, while the broader STOXX 600 has edged up 0.1%.

Both the STOXX 50 and the STOXX 600 hovered around the flatline on Friday, following losses in the previous session, as investors continued to digest a fresh round of corporate updates while remaining cautious toward software and AI-driven names. Shares of Stellantis plunged nearly 19% and were halted from trading after the automaker said it expects to absorb a €22 billion hit from restructuring its business to accelerate the rollout of electric and hybrid vehicles. Societe Generale fell 3% after its quarterly results failed to meet investor expectations. Mining stocks were also under pressure, with Rio Tinto down 1.1% and Glencore slipping 0.8% after both companies confirmed they had abandoned talks over a potential megamerger. In contrast, Novo Nordisk climbed more than 4% after the US FDA threatened action against illegal copycat drugs. For the week so far, the STOXX 50 is down 0.3%, while the broader STOXX 600 has edged up 0.1%.