Updates after markets close

By Avinash P, Johann M Cherian and Purvi Agarwal

Feb 25 (Reuters) - European shares closed at a record high on Wednesday, underpinned by a rebound in financials after HSBC raised a key lending target, while concerns that newer AI models might imminently disrupt traditional businesses appeared to ease.

The pan-European STOXX 600 index .STOXX ended 0.7% higher at 633.47, eclipsing Friday's record close of 630.56.

Banking stocks .SX7P, .SX7E gained 2.8%, largely boosted by a near 8% gain in HSBC HSBA.L. Shares of Europe's largest lender hit a record high as it raised a key earnings target after its annual profit exceeded expectations, despite logging a $4.9 billion one-off charge.

Global sentiment also improved after U.S.-based AI startup Anthropic partnered with several companies and launched new AI plug-ins on Tuesday, signalling that traditional businesses are adapting to AI advances rather than facing immediate disruption.

"The Anthropic news might reinforce hope that AI will integrate with software providers rather than replace them. This could be a powerful message that helps soothe investors who have been caught in an existential crisis about the future of the global economy in the age of AI," said Kathleen Brooks, research director at XTB.

The easing fears helped allay worries over margin pressures and improved risk appetite globally, benefiting vulnerable banks, that saw sharp declines on Tuesday, amid bouts of volatility.

"Volatility is likely to persist in the near term as markets debate and ultimately seek to price the terminal values of companies that could be disrupted by AI, all while assessing the implications of Trump's shifting tariff targets," a group of strategists led by Mark Haefele at UBS said.

Meanwhile, mining .SXPP and utilities .SX6P stocks each hit an all-time high on Wednesday, passing their previous peaks in 2008, the latest sign of a broadening out of last year's rally in European stocks.

Onshore wind turbine manufacturer Nordex NDXG.DE jumped 17.4% to top the STOXX 600 after reporting better-than-expected core profit for 2025.

On the flipside, Diageo DGE.L lost 12.7% and weighed on the index after the beverage maker cut its annual sales and profit forecast for the second time in four months and also slashed its dividend. The broader food and beverages index .SX3P slipped 2.1%.

Auto1 Group AG1G.DE slumped 18.2% after the German second-hand car dealer forecast lower-than-expected EBITDA for 2026.

Shares of E.ON EONGn.DE hit a 15-year high after Europe's largest operator of energy networks said it is raising its spending to 48 billion euros ($57 billion) by 2030 to prepare for data center build-out across Europe.

Investors also monitored developments on the trade front with the possibility of new U.S. tariffs rising up to 15%. AI-chip giant Nvidia's NVDA.O results later on Wednesday will be the next test for markets.

(Reporting by Avinash P, Johann M Cherian and Purvi Agarwal in Bengaluru; Editing by Sherry Jacob-Phillips and Shailesh Kuber)

((Avinash.P@thomsonreuters.com;))