European shares muted as investors assess Mideast developments, corporate earnings

Sanofi SA

23/04/2026 10:31

L'Oreal shares rises after strong first quarter

Euro zone business activity contracted in April-PMI

Nokia hits 16-year high after AI business outlook raised

Nestle says "very little impact" of Iran war, shares surge

Updates with closing numbers

By Ragini Mathur, Twesha Dikshit and Utkarsh    Hathi

April 23 (Reuters) - European shares were little changed on Thursday as investor worries over collapsed U.S.-Iran peace talks and weak economic data outweighed upbeat corporate results.

The pan-European STOXX 600 index .STOXX closed flat at 614.20 points. Regional bourses were mixed, with France's CAC 40 .FCHI rising 0.9%, while Spain's IBEX 35 .IBEX dropped 0.7%.

Iran released footage of commandos storming a cargo ship, underlining its grip on the Strait of Hormuz following the collapse of peace talks. The developments left markets nervous about the durability of the fragile ceasefire.

European equities remain below pre-war levels with analysts pointing to their vulnerability to high energy prices, lagging behind their U.S. peers as Wall Street indexes trade near record highs.

"Europe has a lot of industrial sectors that are cyclically impacted. I'm not talking about defence-related, which will be more shielded, but in terms of the exposure to the global economy," said Janet Mui, head of market analysis at RBC Brewin Dolphin.

"Analysts will be very closely watching the sector divergence within European sectors because of the impact of the war, the renewed inflation pressure, and also the weakening growth backdrop."

CORPORATE EARNINGS ON TAP

Company results offered some relief. The outlook for European corporate health has slightly improved, the latest LSEG data showed, with blue-chips excluding energy expected to report a 0.4% increase in first-quarter earnings.

Nestle NESN.S shares jumped 5.9% after the world's biggest packaged food company said it had seen "very little impact" on global business from the Iran war so far. The food and beverages .SX3P index rose 1.6%.

 The telecom sector .SXKP climbed 1.6%, aided by Nokia's NOKIA.HE 6.4% surge after the network gear maker
raised growth targets
 for its AI business and beat first-quarter profit estimates.

The personal and household goods index .SXQP gained 1.3%. L'Oreal OREP.PA shares jumped 9%, recording its biggest one-day gain since 2008, after the French cosmetics group
posted
 first-quarter sales that beat analysts' expectations.

Safran SAF.PA rose 2.4% after the French jet engine maker said it expected its
missile propulsion business
 to grow sharply over the medium term, adding that the Middle East conflict was not expected to significantly affect the second quarter.

 The healthcare sector edged 0.2% higher. French drugmaker Sanofi SASY.PA rose 1.2% after
reporting
 first-quarter results above expectations.

Roche ROPC.S shares rose 3.8%, despite the Swiss drugmaker flagging a drop in first-quarter sales due to foreign exchange impact. Bloomberg reported that the firm's
cancer pill
 would be launched by year end.

But banking .SX7P shares dropped 1.2%, weighing heavily on the index.

 On the economic front, business activity in the euro zone
suffered a surprise contraction
 in April with the Iran war sapping demand as prices soared.

 (Reporting by Ragini Mathur, Twesha Dikshit, and Utkarsh Hathi in Bengaluru; Editing by Rashmi Aich, Shreya Biswas and Louise Heavens)

 ((Ragini.Mathur@thomsonreuters.com; utkarshtushar.hathi@thomsonreuters.com))