European stocks pause near record highs as earnings optimism offsets energy supply concerns
The pan-European Stoxx 600 holds near all-time highs after a rally driven by upbeat corporate results
Published Wed, Aug 12, 2026 · 06:37 AM
[BENGALURU] European shares ended little changed on Tuesday (Aug 11), hovering near record highs as optimism over a strong earnings season offset caution stemming from uncertainty around the supply of energy through the Strait of Hormuz.
The pan-European Stoxx 600 was flat at 660.51 points, holding near all-time highs after a recent rally driven by upbeat corporate results, as investors balanced earnings optimism against geopolitical risks in the Middle East.
“The bigger question is can that earnings momentum be sustained? The market seems to think so,” said Steve Sosnick, chief market analyst at Interactive Brokers.
“As long as the world’s energy supplies don’t get any worse, it’s reasonable to think that could occur.”
LSEG estimates show that earnings are expected to increase 22 per cent in the second quarter. Excluding the energy sector, however, earnings growth is projected to be 11.5 per cent.
Oil prices firmed 1.2 per cent on Tuesday as traders weighed signs of progress in Iran-Oman talks against evidence of continued disruption to energy flows.
Kpler data showed traffic through the Strait of Hormuz at six vessels on Monday, compared with a 10-day average of roughly 11.
Meanwhile, Bloomberg News reported, citing Pakistan’s defence minister, that the US and Iran are close to “some sort of agreement”.
Rising energy prices supported oil and gas stocks, but concerns that a prolonged disruption around the Strait of Hormuz could stoke inflation and cloud the outlook for monetary easing kept broader risk appetite in check.
“The pause this week reflects some caution around the Iran conflict and renewed pressure on oil prices. That is the key near-term risk for European markets,” said Gordon Kerr, European macro strategist, at KBRA.
The energy sector jumped 1.7 per cent, while tech shares rose 1.1 per cent, providing further support. The sector remains among Europe’s top performers this year, up about 24 per cent year to date.
Investors are now awaiting euro zone employment and gross domestic production data, as well as US consumer price figures later this week, for further clues on the path of interest rates.
Among individual movers, Alcon gained 4.7 per cent after the Swiss-American eye-care company raised its full-year earnings forecast.
Danish facility manager ISS gained 4.4 per cent after reporting half-year results above estimates.
Spirax Group slid 5.6 per cent to the bottom of the Stoxx 600 after the engineering firm reiterated its full-year forecast for mid-single-digit organic revenue growth and margin expansion.
The insurance sector declined 1 per cent, with Legal & General down 3.1 per cent after UBS cut its rating on the stock to “sell” from “neutral”. REUTERS
