Updates after markets close
Banks lead sectoral decline on AI disruption fears
Edenred, Forvia gain after quarterly results
Chipmakers lead tech shares higher after AMD-Meta deal
By Johann M Cherian and Purvi Agarwal
Feb 24 (Reuters) - European shares rose against a backdrop of broader market gains on Tuesday, tracking increased risk appetite on Wall Street, although investors awaited clarity on U.S. trade policy after last week's strike down of President Donald Trump's tariffs.
The pan-European STOXX 600 index .STOXX reversed earlier declines to close 0.2% higher, close to the record high hit on Friday.
Base metal miners .SXPP rose the most, rising 1.5% as copper prices hit an over one-week high. Consumer staples stocks and utilities .SX6P followed.
Chip-related stocks rose after U.S. peer Advanced Micro Devices' AMD.O deal with Meta Platforms META.O to sell up to $60 billion worth of AI chips, and tie-ups between software companies and AI lab Anthropic to develop new tools revived interest in the sector.
In Europe ASML ASML.AS and Infineon IFXGn.DE both rose more than 1%, while the wider sector .SX8P was 0.7% higher.
WINNERS AND LOSERS AS SKILLS TRANSFERRED
"Disruptive technology is about a transfer of skills and produces winners and losers rather being an outright negative," said Mohit Kumar, an economist at Jefferies.
"This year will be a lot about choosing winners and losers in the investment portfolio. We are not yet ready to step in and fade the AI-disrupted sectors."
Most sectors on the STOXX 600 ended the session higher, although financials and media stocks did not.
Banks .SX7E, .SX7P fell 1.3%, on renewed concerns that newer AI models could disrupt traditional businesses. Financial services companies .SXFP lost 0.3%
Meanwhile, trade uncertainty persisted as Trump's new blanket tariff rate took effect after his earlier tariffs were deemed unconstitutional.
The new rate has raised questions about trade deals struck last year. The European Parliament on Monday postponed for a second time a vote on the trade agreement signed with the U.S.
Analysts pointed to a bearish analysis from Citrini Research on the possible risks to the global economy and the broader financial sector.
The auto sector has been at the forefront of discussion on the impact of tariffs, but the broader auto sector .SXAP gained 1.9% on Tuesday. Among individual stocks, Forvia <FRVIA.PA> climbed 2.8% after the car parts supplier forecast higher operating margin of between 6% and 6.5% in 2026.
French vouchers and benefit cards provider Edenred <EDEN.PA> was another strong performer. It added 3.9% after reporting 2025 core earnings above market expectations, citing rising sales and initial benefits from its cost-cutting and efficiency plan.
Unite Group UTG.L bottomed the STOXX 600 with an over 14% loss after Britain's largest student housing provider said its annual income could fall by up to 13% in 2026.
Engine maker MTU Aero Engines <MTXGn.DE> lost 6% after forecasting 2026 results broadly in line with analyst expectations, as it navigates the fallout from partner Pratt & Whitney's warning on defective engine components last year.
(Reporting by Johann M Cherian and Purvi Agarwal in Bengaluru; Editing by Sherry Jacob-Phillips, Janane Venkatraman and Barbara Lewis)
((johann.mcherian@thomsonreuters.com))