European Markets: A Week of Contrasts in Earnings and Tensions

European shares ended a turbulent week flattened by luxury and mining stocks' downturn amid a busy earnings season and geopolitical tensions. The STOXX 600 rose for a fifth consecutive week despite mixed earnings and uncertainty over Iran-Venezuela relations, affecting mining and luxury sectors, while defence stocks rose.

European shares remained flat by the end of a tumultuous week that saw declines in luxury and mining stocks amidst a hectic earnings season and ongoing geopolitical tensions. The STOXX 600, a pan-European index, ended at 614.38 points, weighed down by a 3.2% fall in the luxury index, marking its most significant daily drop since early October.

Swiss jewelry giant Richemont led the decline, dropping 5.4% after BofA global research downgraded it to 'neutral', citing extended valuations from a recent rally. According to Michael Field, chief European equity strategist at Morningstar, "European equities aren't cheap anymore, but not overpriced either; the previous margin of safety has vanished."

Despite the downturn in luxury and mining sectors, the STOXX 600 notched its fifth successive weekly gain, driven by rises in commodity-linked stocks. Early week price surges in precious metals and crude oil, fueled by tensions concerning Iran and Venezuela, propelled the index, which saw minor relief towards the week's close as these tensions eased, notably impacting mining stocks negatively by 1.9%.

(With inputs from agencies.)