By Avinash P and Johann M Cherian
Feb 17 (Reuters) – European shares were steady on Tuesday as investors tracked U.S.-Iran talks and assessed how AI disruptions could reshape business models.
The pan-European STOXX 600 edged up 0.2% to 620.19 points by 0938 GMT, with most sectors higher. Switzerland’s SMI rose 0.6% to a record.
Geopolitics dominated the mood, with the U.S. and Iran scheduled to hold indirect talks in Geneva later in the day to resolve their nuclear dispute, while separate U.S.-mediated peace talks between Ukraine and Russia are also planned, likely focusing on disagreements over territory.
Against this backdrop, defence stocks slipped 1.1%. Defence stocks often drop when geopolitical tensions ease, because investors anticipate lower near-term demand for military equipment and services.
Reflecting some of the nervousness, the Euro STOXX volatility index edged up for the second-straight day, while defensives, which investors prefer in uncertain times, such as utilities and healthcare were among top gainers.
“So given the uncertainties about what the future holds, investors at this point and when valuations and stock markets are hovering around all‑time‑high levels are, attempting to sit back and reassess” said Ipek Ozkardeskaya, Swissquote bank’s senior market analyst.
Sentiment was also stabilizing, following weeks of volatility in global markets, as concerns over artificial intelligence applications potentially pressuring margins in traditional businesses began to ease.
Sectors that had taken a hit at the height of the selloff in Europe such as media and insurance added 1% each.
A better-than-expected earnings season has also encouraged risk-taking.
60% of European companies have beaten earnings expectations, compared with 54% seen in a typical quarter, according to data compiled by LSEG, and earnings are now expected to fall 1.1%, compared with about 4% earlier in the month.
Among top movers on Tuesday, UK’s InterContinental Hotels Group gained as much as 4.4% after the Holiday Inn-owner posted fourth-quarter global revenue per available room above market expectations.
Miner Antofagasta posted a 52% jump in annual core profit, but shares dropped 3.4% and analysts pointed to dividend falling short of expectations and softer copper prices on Tuesday.
Avolta added 5% after UBS upgraded the Swiss travel retailer to Buy from Neutral.
BFF Bank lost 6.6% to a record low as sources said investigations were ongoing into alleged false accounting at the lender.
Enagas said it expects lower profit this year from 2025. The Spanish grid operator’s shares were last up 1.2% in choppy trading.
(Reporting by Avinash P and Johann M Cherian in Bengaluru; Editing by Sherry Jacob-Phillips and Nivedita Bhattacharjee )
