Europe: Shares gain as SAP lifts tech stocks; Middle East on watch

Published Sat, Jul 25, 2026 · 08:28 AM

[BENGALURU] European shares rose on Friday (Jul 24) after registering their steepest one-day loss in two weeks in the previous session, as investors drew comfort from some corporate earnings and assessed the impact higher oil prices could have on monetary policy.

The pan-European Stoxx 600 index edged 0.6 per cent higher to 644.67, rising for the second straight week. Germany’s DAX rose as SAP gained 10 per cent after the software group reported second-quarter current cloud backlog growth ahead of analyst expectations.

The broader technology index added 1.7 per cent, reclaiming some lost ground after quarterly updates from STMicroelectronics and BE Semiconductor failed to impress investors on Thursday.

Investors have been trying to balance artificial intelligence-driven growth against stretched valuations and returns from hefty investments in the technology, leading to swings in share prices in the sector of late.

“The two big problems for the big tech companies are that capex is no longer being funded out of free cash flow alone and that cheaper open-source AI is seriously threatening business models,” said Deutsche Bank analysts led by Jim Reid.

The Stoxx 600 technology sector is up nearly 17 per cent so far this year, just behind energy stocks that have surged about 32 per cent.

On Friday, oil and gas stocks failed to capitalise on Brent crude prices that remained over US$100 a barrel, as a 6.4 per cent drop in Neste weighed on sentiment after the Finnish biofuel maker and oil refiner reported second-quarter core profit slightly below expectations.

“We’ve moved from pricing in a period of weak growth and higher inflation to potentially even recession. We’re not quite there yet… but we could get to that point very quickly,” said Chris Beauchamp, chief market analyst at IG.

The European Central Bank may need to raise interest rates again as inflation risks ran high, three policymakers said on Friday, after the bank left rates steady on Thursday but kept a September hike on the table.

Markets are still pricing in a 25-basis-point increase and about a 70 per cent chance of another similar hike by the end of 2026, according to LSEG-compiled data.

Meanwhile, the US administration imposed new tariffs of 10 per cent and 12.5 per cent on goods from 60 trading partners, over allegations of lax enforcement of forced labour bans, just as a temporary 10 per cent global tariff expired.

Among other stocks, Volkswagen dipped about 1 per cent after the carmaker dropped its previous revenue growth forecast following a 9.5 per cent slump in second-quarter profit. Valmet soared 22 per cent and was on track for its biggest one-day jump on record after the pulp, paper and energy technology company posted second-quarter results ahead of expectations and announced a potential business separation.

Sweden’s Securitas slid 11 per cent and was set for its steepest one-day drop since August 2006 after the security services provider reported a lower-than-expected second-quarter core profit. REUTERS