European shares subdued as luxury stocks, miners weigh

Synopsis

European stock markets ended the week flat. Luxury and mining stocks saw declines. Geopolitical tensions eased, impacting commodity-linked shares. Defence stocks provided some support. Novo Nordisk shares surged on positive news about its weight-loss pill. Investors are navigating a busy earnings season amidst global uncertainties.

European shares were ⁠subdued on Friday, limited by weakness in luxury and mining stocks in a dour end to a week dominated by the start to a busy earnings season alongside geopolitical jitters.

The pan-European STOXX 600 finished flat at 614.38 points, with the luxury ‌index falling 3.2% ‌and logging its biggest daily fall since early October.

Richemont was among the leading laggards, declining 5.4% after BofA global research cut its ‌recommendation on the Swiss jewellery company to neutral from buy and told investors to wait, citing extended valuations after a recent rally.

"European equities aren't cheap anymore, but they're not expensive either. That said, the margin of safety that investors had previously is gone," said Michael Field, chief European equity strategist at Morningstar.

Still, the STOXX 600 logged its fifth-consecutive weekly gain, its longest winning streak since May 2025.

The index has scaled multiple record highs, led by strength in commodity-linked stocks as prices ‌of safe-haven precious metals ‍and crude oil soared earlier in the week on simmering geopolitical tensions ‍over Iran and Venezuela.

On Friday, those tensions appeared to abate, sending ‌mining stocks down 1.9%.

"As you come to the end of the week (following) a pretty strong start to the year, maybe there's just a little bit of a pause as people reflect there are some good fundamental reasons for optimism, but there's a good amount of uncertainty in the world on the geopolitical side," said Richard Flax, chief investment officer at Moneyfarm.

Defence stocks added 1%, keeping a lid on losses on the STOXX index.

Danish drugmaker Novo Nordisk jumped 6.5% after analysts said ‍its weight-loss pill Wegovy made an "encouraging" start after its launch this month. The healthcare index also added 0.6%.

Britain's health regulator approved a higher dose of Wegovy for obesity patients, ‍while Berenberg also ⁠raised its price target on ⁠the stock.

The week had witnessed a mixed bag of earnings updates from the likes of Richemont, BP and BE Semiconductor . Fourth quarter earnings were expected to decrease 4.1% from a year ago, with consumer cyclicals the hardest hit, according to data compiled by LSEG.

HSBC shares dipped 0.4%. The lender said it was undertaking a strategic review of its insurance business in Singapore, as part of efforts to simplify global operations.

Kongsberg Gruppen shares jumped 9.5%, the best individual performer on Friday, after at least two brokerages lifted price targets on the Norwegian defence equipment maker.

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