Europe close: Markets end turbulent week in the green

(Sharecast News) - European equity markets closed higher on Friday, with gains across the region despite a plunge in Stellantis, and a fragile global backdrop dominated by renewed volatility in technology shares. The pan-European Stoxx 600 rose 0.89% to 617.07.

Germany's DAX advanced 0.93% to 24,719.80, France's CAC 40 added 0.48% to 8,277.51, and the UK's FTSE 100 climbed 0.59% to 10,369.75.

Sentiment across global markets has been unsettled by heavy selling in US technology stocks amid growing scepticism over the scale of artificial-intelligence investment plans.

"It's been a week from hell for tech stocks as AI spending plans caused upset across global markets and pushed investors to unplug hyperscalers from their portfolios," said Russ Mould, investment director at AJ Bell, noting that investors were increasingly uneasy about the pace and size of capital outlays across the sector.

Shares in Stellantis were firmly in focus after the auto maker slumped more than 25% following a €22bn write-down linked to its reassessment of the pace of the shift to electric vehicles.

Mould said shares in the Peugeot-to-Fiat group had "driven off a cliff after the company quantified the cost of a miscalculated bet on electric vehicles," adding that Stellantis was taking "a €22bn charge after admitting that it got it wrong on how quickly the world would transition from combustion engines to electric power."

He also noted that investors had suffered a "double blow" from the sell-off, as the company would not pay a dividend this year.

German exports rise in December, industrial production falls

Economic data in Europe was mixed - German exports rose 4% month on month in December, beating expectations for a 1% increase, while imports increased 1.4%, according to Destatis.

Germany exported goods worth €133.3bn and imported €116.2bn, resulting in a trade surplus of €17.1bn.

Exports to the US rose 8.9% on the month to €11.8bn but were down 12.9% year on year, while exports to China increased 10.7% to €7.2bn and shipments to the UK climbed 14.6% to €6.9bn.

Industrial production, however, fell 1.9% in December, dragged down by declines in automotive output, machinery and equipment, and machine maintenance and assembly.

On a three-month basis, production was 0.9% higher, while output was down 0.6% year on year after calendar adjustments, underlining ongoing weakness in Germany's manufacturing sector.

In the UK, house prices rebounded to a record high in January, according to lender Halifax.

Prices rose 0.7% on the month after a 0.5% fall in December and were up 1% year on year, with the average home price reaching £300,077 for the first time.

Halifax said affordability remained a challenge despite resilient activity, noting that wage growth had been outpacing house price inflation and more mortgage deals were now priced below 4%.

EY Item Club said January's increase largely reversed December's decline, with prices up just 0.1% over the past three months, and warned that house price growth was likely to remain subdued over the next year as affordability pressures persist.

Markets also digested US data showing consumer sentiment unexpectedly improved in February.

The University of Michigan's consumer sentiment index rose to 57.3 from 56.4 in January, above expectations, although it remained well below last year's levels.

Patrick Munnelly, market strategy partner at TickMill, said "economic uncertainty and scepticism over AI's returns are driving market volatility and forcing investors to reassess their strategies," with weak labour data adding to broader market concerns.

Stellantis slumps, Kongsberg surges

In equities, Stellantis shares slumped 25.17% after the group announced the €22bn write-down.

Societe Generale fell 1.94% after reporting fourth-quarter earnings.

On the upside, Kongsberg Gruppen surged 18.05% after posting a larger-than-expected rise in fourth-quarter operating profit and reporting an 11% increase in its order backlog in the final three months of 2025.

Renk gained 6.34% after reporting strong revenue and operating profit growth and confirming guidance with order intake at record levels, while Orsted rose 3.48% after fourth-quarter revenues increased 9.8% year on year and EBITDA of DKK 25.1bn came in within guidance, alongside a full-year net profit of DKK 3.2bn.

Reporting by Josh White for Sharecast.com.