European shares snap 4-week rally as higher oil prices temper strong earnings (updated)

Sage group

14/08/2026 17:26

European Q2 earnings grow the most in nearly four years 
Software shares rise on potential Workday takeover report
Aviva gains after upbeat quarterly profit 
Euro zone economy grows 0.4% in Q2  
Updates to closing market prices
By Ragini Mathur, Tharuniyaa Lakshmi and Johann M Cherian
Aug 14 (Reuters) - European shares finished lower on Friday and snapped a four-week winning streak, as rising crude prices and renewed geopolitical tensions offset support from a resilient earnings season.
The STOXX 600 .STOXX ended 0.2% lower at 657.86 and logged a 0.3% drop on a weekly basis. 
Still, the euro zone benchmark was within 1% of a record high, having rallied about 3% in the previous four weeks, underpinned by better-than-expected second-quarter earnings.
Aggregate STOXX 600 earnings are now forecast to grow 23.4%, making it the biggest increase in nearly four years, as profits in the energy and materials sectors soared.
"Companies have been generating efficiencies in their business models and adapting to the increases in costs that they've seen. Consumers also have remained remarkably resilient, given the challenges facing them from higher energy costs," said Michael Hewson, a senior market analyst at iForex.
The relatively smaller tech exposure in Europe has also worked in the region's favour, as global investors look to the region while diversifying their portfolios away from AI-related stocks. 
Data has also pointed to a broadly resilient economy as the region's economy grew 0.4% in the second quarter from the previous three months, in line with economists polled by Reuters. 
"This has led us to broaden our European equity exposure in multi-asset portfolios, taking profit on the incredible ride of European financials and broadening to all sectors across Europe," said Laurent Clavel, global head of multi-asset at AXA Investment Managers, BNP Paribas Asset Management.
However, as Iran and the U.S. remain at loggerheads over the control of the crucial Strait of Hormuz, oil prices are also likely to stay above pre-conflict levels, adding to uncertainty over longer-term impacts on corporate performance and the economy. 
Healthcare stocks .SXDP led sectoral declines with a 1.5% drop, with Zealand Pharma ZELA.CO down over 5.8%. Defence .SXPARO stocks, on the other hand, gained 1.2%, with Rheinmetall RHMG.DE up over 3.2%.
European software companies SAP SAPG.DE rose 2.7%, Nemetschek NEKG.DE climbed 8.4% and Temenos TEMN.S gained 1.8%.
A Reuters report that private equity firm Silver Lake is in talks to acquire U.S.-based Workday WDAY.O rekindled investor interest in the group that had fallen out of favour on AI disruption concerns.
Among others, British insurer Aviva <AV.L> advanced 1.8% after beating first-half profit expectations. The STOXX insurance index .SXIP added 0.8%.
Maersk MAERSKb.CO added 8.7% and hit its highest in four years, extending strong gains after Thursday's stronger-than-expected quarterly results and guidance upgrade.

 (Reporting by Ragini Mathur, Johann M Cherian and Tharuniyaa Lakshmi in Bengaluru; Editing by Rashmi Aich and Harikrishnan Nair)
 ((Ragini.Mathur@thomsonreuters.com;))