European Stocks Pare Losses as Traders Snap Up Defensive Shares

European stocks ended the day nearly unchanged as traders shifted towards defensive shares, such as chemical and food companies, to counterbalance losses in the technology sector. The Stoxx Europe 600 Index closed down 0.1% in London. British American Tobacco saw gains following an upgrade by UBS analysts, while chemicals firms rose after JPMorgan strategists suggested a bullish outlook due to the end of destocking in the industry. Meanwhile, technology shares were impacted by the release of a cheaper AI model from Chinese startup DeepSeek, which also affected AI-exposed power providers like Siemens Energy AG.

Investors are closely monitoring the region's earnings season and the European Central Bank's (ECB) interest rate decisions for future economic growth indicators. The ECB is expected to lower interest rates for the fourth consecutive meeting, while the US Federal Reserve is anticipated to maintain steady rates. Additionally, market volatility is highlighted by President Trump's tariff threats, particularly in Columbia, where he announced and then retracted sweeping tariffs. The situation underscores the uncertainty that markets must navigate.

Key takeaways

European stocks ended the day little changed as traders bought defensive shares to offset technology losses.
DeepSeek's release of a cheaper AI model impacted technology shares and AI-exposed power providers.
Ryanair Holdings Plc reported earnings that exceeded estimates, boosting its stock.
The ECB is expected to lower interest rates again amid the euro-area's economic performance.

European Stocks Pare Losses as Traders Snap Up Defensive Shares

Key takeaways

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