Europe, Feb 28 : European equities closed at record levels on Friday, marking their eighth straight month of gains, driven by stronger than expected earnings from major companies. The pan European STOXX 600 rose 0.1%, extending weekly gains to 0.5%, and achieving its longest monthly winning streak since 2012-2013.
However, banking stocks lagged, dropping 1.7% in their sharpest one day fall in two weeks. Barclays fell 4.2% after reports highlighted potential losses linked to the collapse of UK mortgage provider Market Financial Solutions, while Santander lost 2.8% due to its exposure through Atlas SP Partners. Spain’s financial index underperformed with a 0.7% decline.
Analyst Ipek Ozkardeskaya of Swissquote Bank noted that recent stress in private credit markets, combined with concerns over potential irregularities in mortgages and AI-driven disruption to profits, weighed on financial shares.
Despite these challenges, upbeat earnings from HSBC, Nestle, and Capgemini buoyed overall investor sentiment. Earnings for the quarter are now expected to fall only 0.6% year on year, compared to an earlier forecast of a 4% decline. Defensive sectors such as healthcare and food & beverages saw gains of 1% and 1.5% respectively.
Other notable movements included Melrose, which plunged 11.6% after GKN Aerospace reported weaker than expected 2026 revenue, and IAG, the British Airways owner, which fell 7.4% despite surpassing annual profit expectations amid rising crude prices. Delivery Hero also dropped 4.4%, reflecting a competitive and challenging market environment.
Swiss Re bucked the trend with a 3.7% gain following a 47% rise in net profit and the announcement of an additional $1 billion share buyback.
The market’s resilience reflects investor confidence in corporate earnings, even as uncertainties around AI adoption and banking sector risks remain.