European shares flat as insurance, energy losses offset gains

FRANKFURT: Europe’s benchmark share index closed flat on Tuesday as investors weighed mixed corporate updates, with BP’s decision to suspend share buybacks offsetting gains in the automobile sector following an upbeat forecast from Ferrari.

The pan-European STOXX 600 index finished 0.07 percent lower at 620.97 points, just a whisker away from its all-time high.

BP dropped 6.1 percent after the UK energy giant posted quarterly profit in line with analysts’ expectations and suspended its share buyback programme as it wrote down around USD4 billion in its renewables and biogas businesses.

“While there has been an industry-wide pullback from green investment, this paints a sorry picture for BP’s ability to leverage its expertise into the green energy economy,” said Joshua Sherrard-Bewhay, ESG analyst at Hargreaves Lansdown. The broader energy sector slipped 1.6 percent.

Meanwhile, concerns about artificial intelligence disruption, which have dominated headlines in recent weeks, showed signs of spreading to new corners of the market.

Insurance stocks fell 1.8 percent and led sectoral declines, tracking their US peers after Insurify released an AI-powered comparison tool built on ChatGPT.

In contrast, automobile and parts sub-index gained 2.5 percent after Ferrari said its core earnings would rise slightly in 2026 while beating analyst estimates for the fourth quarter of 2025. The luxury carmaker’s shares jumped 10.2 percent, marking their biggest one-day gain since March 2020.

Stocks of other luxury goods gained 2.8 percent and were among top sectoral performers, led by a 10.9 percent surge in France’s Kering. Investors were relieved that the company reported a slightly smaller-than-expected drop in fourth-quarter sales, as new CEO Luca de Meo battles to stabilise the Gucci owner.

Despite Tuesday’s muted performance, the STOXX has outperformed its US rival, the S&P 500, so far this year as worries about a trade rift with Washington subside and traders bet on a reviving European economy.

“Geographical diversification is going to be much more important this year than it has been in previous years, given the policy uncertainty that we’ve experienced even in the first few weeks of this year from the Trump Administration,” said Fiona Cincotta, senior market analyst at City Index.

“The rotation into cyclicals, into value stocks, is something that will favour European markets.”