By Avinash P, Johann M Cherian and Ragini Mathur
Feb 13 (Reuters) – European shares edged lower on Friday as concerns about potential AI‑driven disruptions kept investors cautious, while they also assessed a mixed bag of corporate earnings and economic data.
The pan-European STOXX 600 index closed 0.13% lower at 617.7 points. However, it capped a turbulent week with a marginal gain of 0.09%.
Since late January, a cascade of new artificial intelligence tools has sent shockwaves through global markets. Investors tried to weigh the impact of newer models on traditional businesses, at a time when major tech firms have forecasted higher spending to develop the technology.
Disappointing gross margins from U.S.-based Cisco Systems <CSCO.O> this week added to jitters.
So far, logistics companies, insurers, index operators, software companies and asset managers in Europe have borne the brunt of the selloff.
The banking sub-index led the losses this week, down 5.4%, with the sharpest weekly fall in over 10 months.
The financials-heavy Italy benchmark slid 1.7% on Friday.
While tech shares climbed 1.7% on the day, the sector also remained among the week’s laggards.
“The narrative here is about AI overinvestment, valuations and disruption,” said Kyle Rodda, senior financial market analyst at Capital.com.
“That is: AI companies are spending big and leveraging up to stay ahead in the AI arms race, reducing potential returns on capital, as new disruptive models hit the market and cast doubt over to whom the spoils of the AI boom will go.”
DATA, EARNINGS IN FOCUS
On the data front, U.S. consumer prices increased less than expected in January, prompting traders to marginally increase bets on a Federal Reserve interest-rate cut in June.
Across the Atlantic, data revealed the EU’s trade surplus kept shrinking, as tariffs weighed on exports to the U.S. and rising Chinese imports crowded out domestic production.
There was some relief on the earnings front. European companies’ quarterly earnings are now expected to fall 1.1% on a year-on-year basis, improving from the 4% decline projected earlier, according to data compiled by LSEG.
Still, it is expected to be the worst earnings performance in the past seven quarters, as companies navigate steep U.S. tariffs.
The defence sector led gains on Friday, rising 3.3%. Aerospace group Safran jumped 8.3% to a record high after forecasting increased revenue and earnings for 2026.
Capgemini climbed 5.1% after the French IT services group reported full-year revenue that beat its own target.
By contrast, L’Oreal slipped 4.9% after the owner of Maybelline make-up missed fourth-quarter sales growth estimates. The broader personal and household goods sector fell 0.8%.
(Reporting by Avinash P, Johann M Cherian and Ragini Mathur in Bengaluru; Editing by Rashmi Aich, Eileen Soreng and Chris Reese)
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