European equities inched higher on Thursday, supported by gains in heavyweight energy and defense stocks after Washington imposed new sanctions on major Russian oil producers. However, persistent U.S.-China trade tensions capped broader advances across the region.
The STOXX 600 index rose 0.2% to 573.32 points by 08:58 GMT, with most major regional benchmarks edging higher. Germany’s DAX slipped 0.3%, while Spain’s IBEX fell 0.2%, as investors remained cautious ahead of renewed trade talks between Washington and Beijing.
The fresh U.S. sanctions targeted Rosneft and Lukoil, pushing oil prices higher and boosting European energy shares. The STOXX Energy Index gained 2.5%, led by BP and Shell, which each advanced around 3%, while Aker BP rose 3.9% and Equinor jumped 4.5%.
Meanwhile, Washington signaled it may restrict software-powered exports to China, escalating trade frictions. President Donald Trump and his Chinese counterpart are expected to meet in South Korea later this month, a potential inflection point in trade relations.
“Commodity and defense stocks are providing the key support today,” said Nick Saunders, CEO of Webull UK. “But the broader market remains cautious due to trade uncertainty.”
Mixed Sector Performance Across Europe
The positive momentum in energy and luxury stocks offset declines in technology and travel shares. The STOXX Aerospace & Defence Index rose 0.8%, supported by renewed global defense spending, while the Luxury Index climbed 1.6% on upbeat corporate results.
However, travel and leisure stocks dropped 1.9%, and technology shares lost 0.9%, pressured by concerns over potential U.S. export controls on China.
Key gainers included:
- Nokia, up 9.3%, after posting third-quarter profits above estimates.
- Kering, up 8.5%, as its luxury sales decline was smaller than expected.
- Rentokil Initial, surging 10.9% after a 3.4% rise in Q3 organic revenue.
- BE Semiconductor, rising 2% after an earnings beat.
Earnings Misses Weigh on Sentiment
Not all corporate updates were positive. SAP slid 2.5% after reporting weaker-than-expected quarterly results, while Dassault Systèmes plunged 16.3%, the day’s worst performer, following a cut to its full-year revenue guidance. Sodexo also dropped 7% after forecasting slower growth for 2026.
Despite these setbacks, broader sentiment held firm as investors balanced strong energy earnings against geopolitical risks and mixed corporate results. With trade frictions looming and inflation data ahead, European markets are expected to remain volatile in the near term, yet resilient amid global uncertainty.