European shares log best week since June as earnings lift mood

European shares ended Friday, October 16, higher, completing their strongest week since late June as corporate earnings helped offset pressure from a global technology-stock selloff, Economic Times Markets reported. The pan-European STOXX 600 rose 0.7% to 644.74 points, reaching its highest level in more than three weeks and gaining over 2% across the week.

Technology stocks globally faced selling as investors worried about greater dependence on debt to finance artificial-intelligence infrastructure and competition from China. In Europe, however, results from chip-equipment maker ASML, chip-systems supplier Aixtron and telecom-equipment company Ericsson helped support sentiment. The European technology sector finished flat.

Earnings drive sharp gains in Aixtron and Nordex

Aixtron climbed 6% after third-quarter order intake exceeded estimates and the company maintained its annual guidance. Wind-turbine maker Nordex jumped 12.3% after reporting better-than-expected quarterly core profit and raising its full-year margin outlook.

Not every improved outlook translated into a share-price gain. Schneider Electric reversed an earlier rise and was last down 1.8%, despite increasing its 2026 core-profit and revenue targets for the second time.

Nestle gained 1.7% following JPMorgan's upgrade of the Swiss food and drinks company to an overweight rating. The broader food and beverage index rose 1.4%. Healthcare slipped 0.3% after gaining more than 4.6% over the preceding two sessions.

Strong profit growth expected, with more results ahead

STOXX 600 companies are expected to deliver third-quarter earnings growth of 20.7% from a year earlier, according to LSEG I/B/E/S data cited in the report. That remains a substantial increase, although it is slightly below the 21% forecast a week earlier. SAP, ABB and Barclays are among the companies scheduled to report next week.

Daniela Hathorn, senior market analyst at Capital.com, said the week's performance illustrated the benefits of diversification when concentrated exposure to US technology comes under pressure. Michael Field, Morningstar's chief equity strategist, said a strong earnings season could improve confidence and help markets return towards recent highs.

Inflation keeps further ECB tightening in view

The euro zone's final harmonised inflation reading for September was 3.8% year-on-year, matching economists' expectations but remaining above the European Central Bank's 2% target.

The report said the ECB had increased borrowing rates by a cumulative 50 basis points in 2026 to 2.50% to counter price pressures linked to higher oil prices. LSEG data indicated that investors were pricing in a further quarter-percentage-point increase at the December meeting.