European stocks retreat from record highs as investors assess mixed earnings

Published Fri, Feb 20, 2026 · 05:52 AM

EUROPEAN shares slipped on Thursday, with miners and utilities leading the sectoral decliners, as investors sifted through a mixed bag of earnings from the likes of Airbus, Rio Tinto and Nestle.

The pan-European index closed 0.5 per cent lower at 625.33 points, retreating sharply from a record close on Wednesday.

Most of the major regional bourses also traded in negative territory.

Airbus shares fell 6.8 per cent after the world’s largest planemaker softened its main jet production target, blaming engine maker Pratt & Whitney for failing to strike a crucial supply agreement.

The world’s largest iron ore producer Rio Tinto declined 3.7 per cent after the firm reported flat annual earnings that missed expectations on weaker iron ore prices.

Nescafe coffee maker Nestle rose 3.9 per cent after reporting better-than-expected fourth-quarter sales growth and said it planned to sell its ice cream business.

“The idea of spinning off its ice cream division has really struck a chord because these are the divisions that are going to have to be really fleet of foot over the coming years,” said Danni Hewson, head of financial analysis at AJ Bell.

“As consumer habits change and more people use weight loss drugs, reducing ice cream consumption, companies must carefully rethink the products they’re developing.”

Earnings expectations have improved over the course of this reporting season. Data compiled by LSEG show analysts now see quarterly earnings dropping 0.6 per cent year-on-year, compared with a 4 per cent drop earlier this month.

Leading the sectoral losses, miners dropped 2.1 per cent, pulling back after Wednesday’s sharp rebound.

Meanwhile, utilities fell 1.8 per cent, marking their sharpest one-day fall since July. Investor sentiment took a hit after Italy approved a hike in corporate taxes on energy firms to help cut power bills.

A disappointing update from Centrica also weighed on the sector. The British Gas owner warned that 2026 profit at its energy trading arm would miss its forecasts and paused its share buyback programme, sending its shares down 5.2 per cent.

Investors globally were on edge after the US and Iran heightened military activity in the oil-rich Middle East, even as talks on Tehran’s nuclear programme in Geneva showed signs of progress.

European energy stocks were 0.9 per cent higher, tracking a 2 per cent gain in crude prices.

Among others, French telecoms group Orange climbed 7.5 per cent to an over 16-year-high after targeting organic cash flow of around 5.2 billion euros (S$7.7 billion) by 2028.

Arcadis fell 9.6 per cent after the Netherlands-based sustainable design firm’s 2025 revenue missed analyst expectations. REUTERS