European stock markets edged higher on Thursday (14 May) as technology shares boosted sentiment, although investors remained cautious over stalled U.S.-Iran talks and a closely watched summit between Washington and Beijing.
The pan-European STOXX 600 index rose 0.4 per cent to 613.98 points by mid-morning trading, building on Wednesday’s 0.8 per cent gain. Germany’s DAX climbed 1.2 per cent, while Britain’s FTSE 100 was broadly flat despite stronger-than-expected economic data showing the UK economy expanded by 0.3 per cent in March.
Trading activity remained subdued, with several European markets closed for public holidays.
Markets are balancing optimism around artificial intelligence with fears of wider instability in the Middle East. U.S. President Donald Trump is expected to press China to help end the Iran conflict after negotiations between Tehran and Washington stalled.
“We await the developments in China. But really the focus is on AI,” said Frédérique Carrier, head of investment strategy at RBC Wealth Management. “All eyes are on the Middle East crisis for that to really be resolved.”
Technology stocks were among the strongest performers. Europe’s technology index gained 1 per cent, helped by semiconductor companies including STMicroelectronics, ASM International, BE Semiconductor Industries and Infineon Technologies, which rose between 1.4 per cent and 2.8 per cent.
The rally reflects growing confidence that companies linked to AI and data centres will continue to benefit from heavy investment. However, European shares remain below the levels seen before the outbreak of the Iran conflict, while U.S. markets have already returned to record highs.
Carrier said Europe’s earnings season had been solid, particularly for banks and industrial firms linked to electrification and data centres, although it “pales in comparison” with the stronger performance seen in the United States.
Among individual companies, Burberry fell 4.7 per cent after reporting fourth-quarter sales in line with expectations. Watches of Switzerland jumped 14 per cent after forecasting full-year operating profit above market expectations.
Investment group 3i Group dropped almost 16 per cent following its results, dragging the financial services sector down 0.8 per cent.
Meanwhile, Legal & General rose 5.2 per cent after the Financial Times reported that the company was not considering a sale.
Investors are also reassessing the outlook for interest rates after European Central Bank chief economist Philip Lane signalled that further rate rises may be needed to tackle inflation.
Money markets are now pricing in more than two ECB rate increases this year, with the first expected in June.
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Iran’s Assembly of Experts has backed withdrawing from the Nuclear Non-Proliferation Treaty (NPT) and overhauling the country’s defence doctrine, calling both steps essential to national security and deterrence.
The U.S. Federal Aviation Administration lifted a nationwide ground stop on Friday (13 November) after a communications failure at air traffic control centres caused chaos at airports and triggered the longest nationwide shutdown since the 9/11 attacks in 2001.
President Vladimir Putin agreed on Thursday to let European representatives join the next round of Ukraine peace talks while the United States continues to work towards what could become the largest prisoner exchange of the Russia-Ukraine war.
Microsoft struggled to restore its services on Friday after a major outage disrupted Outlook, Teams and Copilot across the United States and Asia-Pacific region.
Kazakhstan-linked hackers stole thousands of national security documents from Tajikistan, a cybersecurity company has said.
Hungarian authorities have recovered nearly $20 million in cash hidden in buildings and buried in forests as part of a bribery investigation into Miklós Seszták, a former minister under ex-Prime Minister Viktor Orbán.
U.S. President Donald Trump, Russian President Vladimir Putin and Chinese President Xi Jinping are set to hold a historic trilateral meeting in Shenzhen on 19 November. The White House says the talks will focus on nuclear arms reductions, with Iran also on the agenda.
U.S. negotiators floated the idea of Ukraine withdrawing from the eastern Donbas region in exchange for NATO membership, Ukrainian President Volodymyr Zelenskyy has said.
China is taking its space technology ambitions beyond its borders, with a major deal to build a network of 20 artificial intelligence-powered satellites for Oman.
Europe will send a team of diplomats to Ukraine peace talks rather than a single envoy, EU leaders agreed on Friday at the end of a summit in Dublin.
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