European equities are on course to close their strongest week since June, carried by a corporate reporting season that has repeatedly outrun forecasts.
The pan-European STOXX Europe 600 rose 0.2% in early trading on Friday and is tracking a 1.4% gain across the five sessions — its best weekly performance in nearly six weeks. Germany's DAX added 0.3%, while France's CAC 40 and London's FTSE 100 each gained 0.2%.
The benchmark closed at a record 656.86 points on Tuesday, up 0.7% on the day and surpassing the previous high set in early July.
Earnings forecasts revised sharply upward
The clearest driver has been profits. Aggregate second-quarter earnings for STOXX 600 constituents are now expected to grow by close to 21% year on year, according to data compiled by LSEG. At the start of May, analysts were forecasting around 12.5%.
Ruben Dalfovo, investment strategist at Saxo Bank, pointed to consecutive months of gains and attributed the run primarily to rising corporate profits.
A retreat in sovereign bond yields has added support, as has a pullback in crude prices from recent peaks, which eases input costs across energy-intensive sectors.
Winners and losers
Deutsche Telekom climbed 5.5% after enlarging its 2026 share buyback by €3 billion, taking the programme to as much as €5 billion; the wider telecoms sector rose 1.6%. Irish nutrition group Glanbia gained 8.4% after half-year revenue grew 7%.
Not every update landed well. Zalando fell 13.4% — the worst performer on the index — after the fashion retailer guided 2026 revenue and growth towards the lower half of its previous range and narrowed its adjusted operating profit outlook. Siemens dropped 4.5% as quarterly results missed the top end of estimates despite record industrial profit and a record order book. Rheinmetall fell 3.5% after cutting its outlook to reflect a cancelled German government order.
Markets have also been tracking talks between the United States and Iran, with traders positioning for a possible diplomatic breakthrough.
